Max Keiser sat down with publisher David Morgan to discuss the turmoil in the repo markets, which are already flashing red sirens, and how banks that are desperate for cash may come to insolvency one by one.

“If these banks, like JP Morgan or Deutsche Bank, are unable to settle trades because they don’t have the cash…then when the end of the quarter comes they’re gonna have to, by law, if there is the rule of law anymore, it’s an open question, announce that they’re insolvent. And therefore, they’re gonna set off the cascade… and [it] will be the continuation of the 2008 crisis, but much much worse,” Keiser told his co-host Stacy Herbert as they delved into exploding “debt bomb” that the Federal Reserve is trying to cover up in the repo market.

The rapidly increasing intervention into the repo market indicates that there is “obviously some insolvency” in the system, warned Morgan, the publisher of The Morgan Report, which covers economic news.He explained that the banks are required to have a certain reserve of cash on hand and if they don’t, they have to borrow overnight to meet this requirement. They may go to other banks to make their books square, but if other lenders turn them away, they have to ask the Fed as a last resort.

“That’s kind of telling that [in] the banking system at large, no bank would loan to me, because I don’t trust the bank that needs the money…So it puts some caution into the system,” Morgan said. “So it’s sort of the walk of shame to go to ask the Fed to borrow money when another bank or other banks won’t loan to you.”

Given that this could happen multiple times and because all the lenders are interconnected, the fall of one of the banks could cause a domino effect, like what happened when Austria Creditanstalt bank failed and initiated the Great Depression, Morgan said.