NEW YORK (Reuters) - Jim Rogers, one of the world's most prominent international investors, on Thursday called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded.

Speaking by teleconference at the Reuters Investment Outlook 2009 Summit, the co-founder with George Soros of the Quantum Fund, said the government's $700 billion rescue package for the sector doesn't address how banks manage their balance sheets, and instead rewards weaker lenders with new capital.

Dozens of banks have won infusions from the Troubled Asset Relief Program created in early October, just after the Sept 15 bankruptcy filing by Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz). Some of the funds are being used for acquisitions.

"Without giving specific names, most of the significant American banks, the larger banks, are bankrupt, totally bankrupt," said Rogers, who is now a private investor.

"What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent," he said. "What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics."

No problem here. Who cares about fraud of these proportions.

Politics demands that we make a bad situation worse, and generational, as quickly as possible.

Thanks for your comment Man. Elizabeth Warren was on Fresh Air yesterday and basically said the financial bailout is wrongheaded with few controls, will help the wrong person, and lacks mechanisms to ascertain conflicts of interest. She said unless we get the housing market out of the slump that foreclosures is increasing, we will continue to have problems. This snowball just keeps getting bigger.

I looked at this last night and could not figure out what the hell you were talking about and this morning saw it on the news. How in the hell do you steal $50,000,000,000. Haliburton was the closest to that figure that I ever saw. I sure hope they get the felon's vases and cars and vacation homes. He has got to have some stash in his freezer.

Let's not put the fellow in prison. Let's do something more appropriate (and fun!) - make him work as a garbage collector for the rest of his life, pay the bulk of his salary back to the people and the estates of people he stole from, and go home to a public housing unit every night. And in only 1 million years, approximately, he will have repaid what he took.

We are almost to the end of the beginning. Once the hedge funds face real redemptions because institutions will no longer trust them, for good reason, because of all the bubbles the hedge funds are perhaps among the largest, one of them will fail on a counter party transaction, analogous to Credit Anstalt, and whoompf, there goes the system. The correct value of the Dow is at least as low as 7000, and maybe 5400. All you have to do is look at the Nikkei 1989 at 40,000 and now at 8400 to get the reality of what is going on.
They cannot however, just print money, because the Federal Government does not have the tax base to sterilze the money creation with Treasuries any longer. That is how it finishes. This is anaologous to the Mississippi Bubble under John Law. Same Ponzi scheme and it will, like all Ponzi schemes, end badly.

Dick, when I saw this last night I had to post it to make it seem real. I am totally incredulous and this huge Ponzi scheme seems to be the icing on a big cake of shit.

Don, I agree that we are looking at a situation potentially like Japan in the 90s but with a global meltdown too, and nobody buying our treasuries, period. Will they stop printing money? I wonder. How much more bad news will the market take before the next big leg down?

I thank both of you for your replies.

My understanding of economics is slight, but here's what I want to know: when does the hyper inflation start? Because as someone with a lot of debt and no savings ... that's like a little accidental bail out, maybe.

Yeah, Stella, it's sickening. Why isn't everyone in the street, turning over cars to show their disapproval? I'm beginning to think of Americans as sheep to be herded this way and that.

Black Bart,

"We can print more money!"

And we will. Actually, here's an solution that might work: TAKE BACK CONTROL OF MONEY

The American economy rests on the back of the American worker and consumer. Taxpayers own the government and currency is only a tool enabling commerce.

Take charge of it. Get it working for you, not against you.

http://pacificgatepost.blogspot.com/2008/12/revising-government-relationship-to.html

Once this is done, the other problems will at least begin to resolve naturally, including home owners making their mortgage payments.

Does he have an account in the Caymans we can tap into to fund the war?

madness i say. and why aren't we out in the streets? probably because most are busy watching tv....nick at nite.:)
mary

Amen Bart. And two weeks ago I didn't even know what a ponzi scheme was!

I was just reading about Bernie Madoff in the latest issue of People and was alarmed to learn that he'd been under suspicion of operating a Ponzi scheme for at least 10 years. Why no investigation when so many red flags were right there? Who did he pay off? This great big economical Ick just keeps getting bigger and bigger, doesn't it?