This is why our banks are insolvent. Even without the increases in leverage that have been created over the past 15 or so years, when you see losses like this:

The real shocker, though, is what has happened after those defaults. JPMorgan estimates that $102bn of CDOs has already been liquidated. The average recovery rate for super-senior tranches of debt – or the stuff that was supposed to be so ultra safe that it always carried a triple A tag – has been 32 per cent for the high grade CDOs. With mezzanine CDO’s, though, recovery rates on those AAA assets have been a mere 5 per cent.

Your bank is toast.

That’s 30¢ on the dollar for the best of the best, and just down from that, it’s 5¢ on the dollar.

This is why the big banks are insolvent.