On April 21, Treasury Secretary Timothy Geithner said the “vast majority” of U.S. banks have more capital than needed.  Geithner’s remarks come on the heels of a surge in reported quarterly profits by the big banks.

Within the last year, the true extent of the real estate debacle and ensuing credit crisis in the United States has become blatantly obvious.   But now there is a new phenomenon rearing its ugly head: a credit crisis of the individual that is hitting a large number of Americans straight in the pocketbook. The reason: credit providers have started to batten down the hatches.

It took the statisticians of the National Bureau of Economic Research almost a year to confirm what the rest of us already knew, that the US registered a significant decline in economic activity, thus officially entering a period of recession.  While I am pleased that the members of NBER take their duties seriously, thereby ensuring that they don’t leap to any hasty conclusions, I only wish that similar moderation could be displayed by their colleagues at the Fed and the Treasury.

The fact that after over 30 years of consistent mismanagement and decline, there is still any discussion on whether or not we should allow the now significantly smaller “Big Three” automakers to fail is clear evidence that Washington has lost all common sense.

As the economic crisis continues to unfold, recently a sense of uncertainty has begun to pervade the market. Even dyed-in-the-wool risk takers admit that they don’t know what to think anymore. Inflation, deflation, recession or depression – there are so many vagaries that it appears to be anyone’s guess what will happen next.

The residential real estate sector is in shambles and, some economists say, will not recover until the end of 2010, at the earliest. Now it looks like commercial real estate may be the next block to fall in our “Jenga economy.”

The current financial crisis is supersized, inexorably linked to the rest of the world, ruled by chaos and precariously perched atop a mountain of debt, says Oilver Garret, CEO of Casey Research. And “a rapidly growing money supply at the same time the biggest credit bubble in 25 years bursts makes for a less than desirable scenario.” We could be facing a period of “depflation” says Oliver — an inflationary depression.