Last Friday, the Office of the Comptroller of the Currency reported that for the first time in history commercial US banks have suffered a $3.4 billion quarterly loss in a giant sector that they thought, until now, was solid: that is, bets on interest rates. The loss was more than seven times worse than their previous quarterly loss in that category.

Of the total derivatives loss, only 7.8 percent was in credit default swaps, the instrument that brought down AIG. Notably, 82 percent of total losses were in interest rate derivatives, the solid category. The remainder is in “other.” U.S. banks, alone, control $204 trillion in derivatives today. These facts came from the notable Dr. Martin Weiss. A more detailed look is linked here.

But first, consider the most breathtaking losses of the Wall Street casino came from America’s five biggest banks. In fact, Bank of America’s total derivatives risk is at 179 percent of its risk-based capital; Citibank’s was at 278 percent of its risk-based capital; JPMorganChase was at 382 percent of its risk-based capital; and Goldman Sachs’ total credit exposure at year-end was at a whopping 1,056 percent, or over ten times more than its capital. Do you get the picture now?

Wall Street and the investment banks mostly have messed up this economy so badly it is unbelievable. So you have to get out the Glass-Steagall Act and look at each one of these monsters and let them live or die, depending on whether their assets exceed their debt. I doubt if any of the above would pass the test. They should be closed if they can’t. And the 7,000 other banks in the country that did not play derivatives roulette in the Wall Street casino should be helped, loaned money, after a bankruptcy reorganization.

We should even consider reinstating the law against interstate banking, and allow banks just to operate in one state, all the better to serve their communities. And that should go for foreign banks as well.

This kind of austerity seems in order. As to the Fed, it should be printing money in red not green ink for what it’s worth.

Obama is turning out to be economically dumber than dirt. And he’s playing with the worst people in the world, all related to Goldman Sachs: Geithner, Summers, Emanuel, and briefly Paulson. Their sole object is to recapitalize their losses with taxpayer money via bailouts, handouts, and steal-outs. They don’t care about you and me or anyone. I hope the NSA is reading this communiqué and that they pass it on to Obama.

We are in deep trouble, and the least of it is using IMF currency as a substitute for US currency. A single currency won’t work anyhow. We need to restore the dollar if we want to have a US economy. This isn’t an argument. It’s real. Plus the Fed is in the middle of creating another bubble, this time with its cockamamie Treasuries. Okay, that’s all I have for today, which should be quite enough.