Denninger Knocks One Out of the Park

Will It All Come Tumbling Down?

A couple key points from the piece:

So let me see if I get this right.  

At 5% of non-performing loans a bank is at risk of being insolvent.

But the entire banking system in The United States had its non-performing loan ratio increase from 5.58% in the first quarter to 6.49% in the second, a record, and higher than the 5% level at which the survival of a bank(ing system) is threatened with collapse.

...

Here's reality folks: 

The system still has too much non-performing debt in it, and that percentage is going up, not down.  

It is getting worse, not better.

...

But there is a mathematical limit to this sort of papering over of control frauds.  It cannot go on forever; we do not have the ability to tax or borrow an infinite amount of money.  Unemployment will not ease and true production and consumption cannot resume at a normal level when a trillion dollars or more is being stolen every year to cover up these scams.

The entire piece is worth reading.