... “ThiscouldleaddirectlytoadecreaseintheattractivenessofU.S.governmentsecurities and aconsequentincreaseinborrowingcostsfortheU.S.government and relatedissuingentities “Theextent and interconnectednessofAIG’sbusinessisfar‐reaching and encompassescustomersacrossthegloberangingfromgovernmentalagencies,corporations and consumerstocounterparties.AfailureofAIGcouldcreateachainreactionofenormousproportion ... Despiteknown,endemicvulnerabilities,officialspainttheentirebankingindustrywiththebroadbrushofsafety and trustworthiness.TheFDICexpandsitscoveragetodeliberatelycreateanauraofblanketprotectionforconsumers and businesses.TheTreasurypromisesthatitwillbackstopCitigroup and BankofAmerica.TheFedChairmanpromisesCongressthatnolargeinstitutionswillbeallowedtofail.2. ... Insum,atotalof1,568banks and thriftsareatriskwithassetsof$2.32trillion.That’s6timesthenumberorinstitutions and 15timestheassetsofbanks and thriftsontheFDIC’sfourthquarter2008ProblemList. Giventhedeteriorationinbanks and intheeconomyreportedbythe FDIC and theCommerceDepartment,itislikelythatmorebanks and thriftswillbeaddedtothelistoncefourthquarterratingsbecomeavailable.3AvailableinpdfimageformatprovidedbytheGAOathttp://archive.gao.gov/t2pbat2/152669.pdf.4TheStreet.com’sdatasourcesaretheFederalFinancialInstitutionsExaminationCouncilCallReport and theOfficeofThriftSupervision’sThriftFinancialReportsforthethirdquarterof2008,asprovidedbyHighlineFinancial,Inc.,withreferencetothefourthquarterCallReportsstrictlytodeterminewhichbankswerestillinbusinessatyearend.5TheopinionsexpressedhereregardingTheStreet.comratingsareexclusivelythoseofMartinWeiss and WeissResearch.11TheprecisedifferencesbetweentheFDIC’smethodforflaggingproblembanks and themethodusedherearenotknown.However,theaggregateresultsshouldmakeitclearthatthemagnitudeofthebankingtroublesintheU.S.todaycouldbefargreaterthanwhattheFDICispubliclyrecognizing.12PartIIU.S.CommercialBanksHaveTakenMassive,OftenUnquantifiable,RisksinTheirDerivativesHoldingsThecollapseofmajorfinancialinstitutionssince2008hascomeasashocktobothWallStreet and Washington.Butnearly15yearsago,theU.S.GovernmentAccountabilityOffice(GAO)explicitlywarnedofthispossibility.OnMay18,1994,inalandmarkstudy,FinancialDerivatives,ActionsNeededtoProtecttheFinancialSystem,6itstatedthat:1....