And the Shrill One, Paul Krugman, catches it

So the market was greatly reassured when Tim Geithner declared that the “vast majority” of banks are well capitalized. Count me as baffled. …..

After all, there are a lot of banks in America. There are 1,722 institutions on the Fed’s list of “large commercial banks”. And I have no doubt that most of these banks — indeed, the vast majority — are in fine shape. That’s because they’re regional institutions that never got into the risky games played by the big guys.

But the big guys are where the money is. ….

The construction of the statement was odd, and I noticed it, but missed the connection, that about 20 banks control something in excess of ¾ of the assets out there. If 17 of those banks are insolvent, only 1% of the banks would be in trouble, but a majority of bank holdings would be wiped out.