Cracks in The System

Taxpayers may have to shell out billions to rescue the financial industry

Even diligent readers of the financial pages may be feeling bewildered by the goings-on in the banking industry. One day the headlines are proclaiming good times and rising profits for most financial institutions. Next day they are telling of bank failures and bailouts.

Despite five years of expansion by the U.S. economy as a whole, many banks and savings and loan associations are racked by troubles in the farm belt, depressed conditions in the oil patch and unwise real estate ventures all over the country. While the large majority are solidly in the black, the weakest institutions are in such bad...

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