Multiple Choice Trick Question of the Day: Sheila Bair A) Does or B) Doesn’t Believe 500 Banks Will Fail

Benjamin N. Dover III's picture

According to Senator Jim Bunning of Kentucky, Bair told lawmakers at a private meeting on July 16 that 500 more banks are at risk of failure “unless something dramatic” happens. An FDIC spokesperson, though, quickly denied that Bair ever made the remark, claiming that Bair gave “no estimate” of the number of anticipated bank failures. (See:

While Tyler, Marla and this blog's other naysayers were busy stroking each other’s negativism with yellow dishwashing gloves, this important positive economic news went practically unreported unblogged at Zero Intelligence for more than a week.  Why?  Because as a healthy manifestation of the creative destruction of capitalism, the hundreds of upcoming bank failures don’t comport with ZI’s glass-entirely-empty perspective.  As more banks are destroyed, more opportunities are created for the offshore arms of private equity firms to recapitalize the banks and flip them for a quick profit – the essence of capitalism in the public interest.  Ergo, the more banks that fail, the healthier our financial system is. Savvy investors realize this, which is why the price of Direxion’s 3X Financial Bull ETF (FAS) has skyrocketed recently from $8 to over $51 (reverse 1:5 split, schmeverse 1:5 split). 

ZI, is it any wonder you don't matter to CNBC?

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Artemis's picture

Ben Dover - Pleased to see your name pop up on ZH....wondering where you went.  Looking forward to more of your satirical genius.

BoeingSpaceliner797's picture

Satire.  Bravo Tyler!

Veteran's picture

Glad to see the inimitable Ben Dover contributing to ZH, (can't get into the ZI thing, even though I bought the damn shirt). 



brandy night rocks's picture

Fuck this site AND its cadre of perma-bulls!

Anonymous's picture

I see what you did there.

Tyler Durden's picture

For all confused about the basis/nature/sarcasm content of this article, Zero Hedge would like to welcome Ben Dover to the contributor pool.

Anonymous's picture

whit all due respect ... fuck you man... you got me; ok ? ... and to think that i wasted 3 min of my life writing 2 elaborate and mathematically and logically based contra-arguments just makes this joke more cruel, oh well at least know when i'm mathematically pissed off ( yup there is a term like that ) i can go and work on some more complicated shit ( hint, it involves n-dimensions ) .... shit .. but at least i know that there aren't people out there who are stupid like this ... ok there are, but they keep it on the down-low, because most of them are aware of their stupidity ... something that those whores over at CNBC are not ...

lizzy36's picture

should have let it run all day.

do we get a bio on ben dover (in video)?

Dixie Normous's picture

You blew it.  Should have let it run all day.

Anonymous's picture

call me dense (youre dense). i dont get this post. is this guy serious or tongue-in-cheek? sarcastic?

A) he's referencing the 3x etf's. instant credibility killer. those products were created solely to suck money away from people with etrade accounts who are bad at math.

2) the reasoning that financial companies are increasing in value due to failures is a stretch. maybe the ultimate beneficiaries that leech capital from the FDIC should be more valuable.

I just dont get it.

lizzy36's picture

Sweetheart, an important skill set in life is recognizing sarcasm. 

His name (google ben dover) might have been the tip off. 

Anonymous's picture

ha. thx sweetie, i'm familiar with the pseudonym of ben dover. note i'm asking as I wasn't clear. New contributor = couldve been an email TD got from some pugnacious bull with his chest all puffed out and TD wanted to make a joke of it. I've read saucier things.

Anonymous's picture

is this post a fucking joke, or is this guy really serious ? so you want me to believe that if 500 banks fail, the economy will somehow profit from this shit ... and you assume many many things .... first of all that there is enough liquidity in the system for 500 hundred failed banks to be purchased and then repurchased at a higher price. so ok ... let set up a little formula so we can let say that the average price for purchasing one bank is x and x is derived from Nl( needed liquidity ) / 500 ( number of banks )

so x= Nl/500

and the same goes for the party which purchases one of this bank from the buyer who bought it for x= ( Nl/500)xUb ( units bought )

and for that buyer to profit on his purchase he needs to sell the number of units for x+ x.x%

so for the party which will buy the banks from the original buyer there must be liquidity in the amount of x+x.xx%

and the total liquidity which has to come into the system is TL= (2Nl)+x.xx%(Nl)

and we all know that the no matter what amount we are talking about, but lets say TL=11 billion, the credit is simply not there .... and private equity funds don't have the will to engage in this sort of mechanism. and thats just for starters ... nevermind that the balance sheet of those banks is worth 0, and that they don't have any prospect in the future, because most of them were engaged in a local financing of real estate developing projects and giving mortgages to crack whore who work in McDs. and that demand for those type of loans WILL NEVER COME BACK .... so your little moronic theory makes no sense and its pretty stupid ... so i will ask you Benjamin N. Dov is it any wonder you don't matter to ZI community ...

Jim_Rockford's picture

Anon #13835 - you rock dude.  Tyler, send the brother a ZI shirt.  He earned it!

Anonymous's picture

i meant to say 110 billion not 11 billion .... sorry ..

Anonymous's picture

oh and i will also add Quote: " Ergo, the more banks that fail, the healthier our financial system is. Savvy investors realize this, which is why the price of Direxion’s 3X Financial Bull ETF (FAS) has skyrocketed recently from $8 to over $51 (reverse 1:5 split, schmeverse 1:5 split). "

NO YOU MORON. FAS price didn't jump because 500 banks could fail, it jumped because JPM,BofA, GS etc. reported record or near record earnings in this quarter .... if the whole FAS/FAZ system was a zero sum system than FAS should've tanked because not enough percentage of investors look so far and make ridiculous assumptions like you did in your worthless piece of shit " article " .... and FAZ should've skyrocketed even if there is a slight probability of this happening ... but this market is neither rational nor is it smart ... it's 80% dominated by HTF, 15% in speculators and 5% of people who actually think they can beat the system ... the only thing that apparently matters in this casino is a few wall street players and nothing else ... and Tyler ... please bring back CAPTCHA so morons like this guy can be verified as being a) not retarded and b)somewhat knowledgeable about the topic he's writing about ...

Anonymous's picture

Oh my.. you couldn't even hear the whoosh that was so far overhead.

texpat's picture

I think I heard a sonic boom.

Gilgamesh's picture

After I got in the car, I almost turned around and came back to delete the 'whoosh' comment in hopes that this would go on all day - with how many not knowing who was generally outraged at the topic, and who was playing along.

Anonymous's picture

"While Tyler, Marla and this blog's other naysayers were busy stroking each other’s negativism with yellow dishwashing gloves"


Anonymous's picture

A very interesting chart of S&P earnings...
as to valuations and the p/e... why oh why are websites just talking about beat estimates that were so low they dug a hole in the ground for the bar then flattened it so the companies could easily beat

Dixie Normous's picture

Exactly, the guy on Bloomberg this morning was absolutely giddy that more S&P 500 companies have beaten estimates than ever before in history.

What a tool.

Anonymous's picture

This mess is just getting STARTED!

Anonymous's picture

this is why she demanded (extorted) and received
500b usd a few weeks ago from CONgress
even as the stress tests
came out giving the banks a clean bill of shit....

i strongly agree that all insolvent, undercapitalized
banks should be liquidated.....

but with 500 banks on the table - i believe
bunning over the pos bair - my speculation about
a bank holiday earns new respect (at least among
myself) if they were to be liquidated in
an orderly fashion there would be no need for a your heart out madonna....

Miles Kendig's picture

500b @ 15:1 get you the money needed to take care of ECB/CCE, CMBS and next wave global infection with the assistance of an PRN 550b currency swap line and QE stop loss at 4%.... BTW, the discussions between Bair & Dodd on this started in the time before TARP.

Anonymous's picture

the bair/dodd timing is most interesting....tarp
came on the heels of the meltdown meaning that to
precede tarp means to precede the crisis....

i would conclude that "leaders" knew that
trouble was imminent despite protestations to the
contrary.....methinks the lady doth protest too

unless bair requested the 500b usd for her offshore
caymen island account it sounds as though major
trouble is 15:1 leverage we are
talking 7.5 trillion usd of troubled assets.....
this assumes that the 500b usd would be used to
support deflating/disappearing assets rather than
fund fdic insured account holder bailouts....

Anonymous's picture

Apocalypse Now- A. of course, but not to worry since Potter (the big banks) will take over all of the local/regional Building & Loan companies from the little Peter Bailey's of the world with our bailout money. Many of these little guys are going under because the FDIC is trying to charge all banks for the mistakes of the bigs with higher insurance costs for the fund (it is woefully inadequate at present and with CRE losses yet to be booked and the FASB now reconsidering finding its lost credibility by actually booking real losses more banks will fold). Consolidation is more risk, and those left will have more power.