Friday, Jul 18, 2008
The nightmare scenario for U.S. economic authorities is here:
reuters: As faith in bank bailouts dims, losses set to deepen
confidence in their ability to rescue the country from a housing-led financial panic is now at its lowest level since the crisis began.
"You see a massive potential for financial meltdown on a global scale," said T.J. Marta, fixed-income strategist at RBC Capital Markets.
At the forefront of investor worries is the collapse of California-based mortgage lender IndyMac. Regulators seized the company on Friday after a bank run in which customers panicked over the firm's survival withdrew $1.3 billion over 11 business days. This was one of the largest bank failures in U.S. history. The scariest thing about it is that things seem to be getting worse rather than better. Gerard Cassidy, another RBC analyst, estimates that more than 300 U.S. banks could close their doors in the next three year
3 Comments
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1. malct said...
But many customers have said that when they checked their balances online, tens of thousands of dollars appeared to be missing. And when they went to branches in search of answers, they encountered lines hundreds of people deep and unhelpful staff members. On Tuesday, reports of unruly crowds brought police to branches in Encino and Northridge, although there were no arrests or injuries.
http://www.sun-sentinel.com/business/la-fi-indymac16-2008jul16,0,6586975.story
2. Fjcruiser said...
the big difference between this crisis and those we have experienced in the last 20 years (Russian default, South East Asian crisis, South amrican defaults,Dot com bubble) is this time it is the retail banks who are mostly affected, not the investment banks. When investment banks made all those losses years ago, the retail banking kept on going and eventually the economies recovered.Today we are experiencing a very different crisis and because of their troubles retail banks are unable to provide the necessary liquidity which would allow the economies to function.That is why it could take a very long time for our economies to recover. There are no one available to bail out the retail banks.
3. malct said...
good comment fj shame no-one else seems interested - thank you anyway.