Wilbur Ross: Possibly a Thousand Banks Will Close + Nouriel Roubini: If Lehman collapses expect a run

Dandelion Salad

video at link below

By CNBC.com
15 Sep 2008 | 02:12 AM ET

In an exclusive interview with CNBC.com, Wilbur Ross, chairman and CEO of WL Ross & Co., says he sees possibly as many as a thousand bank closures in the coming months. And this will create opportunities for investors.

“I do think a lot of the regional ones will (close), just as they did in the last savings and loan crisis in the 1990s,” Ross said. (Watch the full CNBC.com exclusive interview with Wilbur Ross on the left)

Ross says he will be looking to pick up smaller distressed institutions. “There will be opportunities, but we will need federal assistance in them, because what we’re mainly looking for is stable sources of deposits, not so much the loan portfolio.”

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Wilbur Ross: Possibly a Thousand Banks Will Close – Financials * US * News * Story – CNBC.com.

h/t: Speaking Truth to Power

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Nouriel Roubini: If Lehman collapses expect a run on all of the other broker dealers and the collapse of the shadow banking system

JJTrader – Sat, Sep 13, 2008 – 07:53 PM

Sep 13, 2008

It is now clear that we are again – as we were in mid- March at the time of the Bear Stearns collapse – an epsilon away from a generalized run on most of the shadow banking system, especially the other major independent broker dealers (Lehman, Merrill Lynch, Morgan Stanley, Goldman Sachs). If Lehman does not find a buyer over the weekend and the counterparties of Lehman withdraw their credit lines on Monday (as they all will in the absence of a deal) you will have not only a collapse of Lehman but also the beginning of a run on the other independent broker dealers (Merrill Lynch first but also in sequence Goldman Sachs and Morgan Stanley and possibly even those broker dealers that are part of a larger commercial bank, I.e. JP Morgan and Citigroup). Then this run would lead to a massive systemic meltdown of the financial system. That is the reason why the Fed has convened in emergency meetings the heads of all major Wall Street firms on Friday and again today to convince them not to pull the plug on Lehman and maintain their exposure to this distressed broker dealer.

Let me elaborate in much detail on these issues…

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Wall Street Bear Discussion Board: View Thread.

h/t: Speaking Truth to Power

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