Tuesday, July 22, 2008

Faith in Bank Bailout Dims

Banking industry losses set to deepen

Sobering economic news story from Reuters:

The nightmare scenario for U.S. economic authorities is here: confidence in their ability to rescue the country from a housing-led financial panic is now at its lowest level since the crisis began.
This means losses for investors, already totaling nearly half a trillion dollars, could mount even further over the next few months, with implications for business investment and the overall health of the economy.
"You see a massive potential for financial meltdown on a global scale," said T.J. Marta, fixed-income strategist at RBC Capital Markets. [...]
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 years, double what he had estimated back in February. Only a handful have failed so far.
Read the full story here.

2 comments:

Curmudgeon said...

But... but... but... how can this be? For the last seven years, we've had a CEO as president, our first one ever. And he and his party have been "getting government off the backs of business" by gutting and dismantling federal banking and financial market regulatory mechanisms put in by the New Deal following the crash and Great Depression. Clearly The Market, freed from troublesome government regulation and led by a CEO president must be leading us all to ever greater prosperity.

Reuters must be mistaken.

Bill C. said...

Well Curm, deregulation has also allowwed the Imatation US oil market participants to plow their record profits back into their pockets thru speculation on the futures. Yesterday oil went up $3.00 due to a storm that might threaten the gulf.

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