I don’t know if I will put into one place a compendium of all the evidence of the on- running heist of capital from the taxpayer to the banking system. Here is one example from Clusterstock:

Banks De-Leveraging At Rapid Fire Pace

Vince Veneziani (Dec. 1, 2009)

Analyst Dennis Gartman points out that banks are beginning to de-leverage post-crisis at a pace never seen before:

The Gartman Letter: One week ago this morning we wrote about the growth in bank assets, drawing upon a chart sent to us by our friend, Eric Pomboy of Syzygy Research Group. We noted that bank assets have been falling rather sharply over the course of the past several months as the nation’s banks collectively and individually deleverage at a pace we’ve not seen before in our lifetime, nor are we likely ever to see again.

From their highs approximately $12.6 trillion in late ’08, bank assets have fallen to $11.75 trillion in recent weeks, and as banks have de-leveraged they’ve essentially swapped-out loans for US Treasury security holdings. We said then that simply by “casting” forward a trendline that we thought rather evident we could guess-timate that the unwinding or deleveraging of America’s banks would stop sometime in mid’11 when total bank assets were down to $10.0-10.5 trillion.

We like to keep things simple. Advanced math and computers scare us, and in the case of Long Term Capital Management, or Bear Stearns, or Lehman or the IMF, they’ve proven utterly and rather completely worthless… or worse!

From $12.6 trillion to $10. 5 trillion is a lot of free money. How much of this lending is non- recourse? What will it be used for?

Some will be ‘lent’ back to the Fed. Or will it? Will the banks instead give IOU’s to the Fed? How much will go into bankers’ pockets? All of it? The Fed is stuck with unredeemable, unsellable junk. As the economy continues to erode, eventually all the loans will go bad. The Fed will be holding the bag. 

Will this fiasco continue until 2011? Not likely. The dollar/oil trade is holding up which jeopardizes the dollar/everything else trade. When the bulk of investors get wind of what’s going on the dollar carry trade will begin to unwind. 

… Unnerving, nevertheless …