Today there are reports coming out of three massive banks currently on the brink of financial meltdowns.  The situation at Belgium's Fortis bank with total assets of about $780 Billion appears most dire with Belgium's central bank trying to craft a rescue plan before Monday.  Over in England talks to save one of the countries largest independent banks Bradford & Bingley are taking place throughout the night. More than likely B&B will end up being nationalized by the British government by the end of the weekend.

Back in the US the situation at our sixth largest bank Wachovia with assets of $800B (or a little more than twice the size of Washington Mutual) has deteriorated significantly in the past week.  Wachovia's problem is nearly identical to that of Washington Mutual, they are holding huge amounts of option ARM's on their balance sheet, that have been defaulting at insane rates.  Their option ARM portfolio alone totaled around $140B with the majority of these being made in California who's housing market has been one of the worst hit.  While they've reserved only a couple billion to cover losses on this portfolio, it's a pretty good assumption the true losses are in the tens of billions.  They've been hit hard the last several days as concern has caused massive withdrawals of deposits and greatly increased their borrowing costs.  They officially put themselves up for sale on Friday and many suitors including Morgan Stanley, Goldman Sachs, UBS and Citigroup have been rumored to be sniffing around.  Given the demise of Washington Mutual these suitors will probably step back, play the role of the vulture and wait for a forced merger by the FDIC.

Right now the lack of trust and the total freezup of intrabank lending are putting a lot of large financial institutions are risk.  Unfortunately, the current bailout bills being debated in Congress will do next to nothing to restore confidence and unfreeze the credit markets.  The true combined losses on balance sheets of these firms are well into the trillions, so throwing $700B at the problem will simply amount to tossing cash into a hurricane.  Once the dominoes start to fall and people wise up to the fact the balance sheets of many of these financials are a fairy tale, nobody is willing to lend, even if they have the money because they are afraid they won't get it back.