Loan losses threaten Banks to provide lower guidance and lay of thousands in what will be known as worst depression in Banking and financial services sector
Sondra Huffington
Jul. 22, 2007

Every bubble ends up in severe meltdowns. It happened after the dot com bubble. It happened after the real estate bubble. It is happening in the banking and financial services sector. Loan losses threaten Banks to provide lower guidance in the next several quarters and years. The subprime mortgage trouble is just tip of the iceberg. Believe it or not, in the middle of all these subprime losses, the US regulators agreed to implement the Basel II capital rules that will require large banks to keep far less reserves jeopardizing the FDIC.

According to many think tanks, banks, investment banks, and other financial services entities are in deep trouble. The loan losses are mounting faster than they can even imagine. The bad loans are not only in residential real estate. The biggest problem is in Private Equity leveraged buyouts. These risky loans are sitting there to topple bank after bank between now and 2012.

Soon these banks will start laying off thousands of employees skyrocketing the employment rate. The economy will plunge into recession led by the financial services sector and the banks.

Merrill Lynch & Co., Lehman Brothers Holdings Inc., and Morgan Stanley helped financial shares in the Standard & Poor's 500 Index tumble the most since March. Google Inc., Intel Corp. and Pfizer Inc. declined following their quarterly reports.

Speculation that the worst housing slump since 1991 will be exacerbated as defaults by the riskiest borrowers surge prompted the Dow Jones Industrial Average to retreat after closing above 14,000 for the first time on July 19. Caterpillar Inc. fueled the decline after its profit dropped on rising costs and falling U.S. sales of truck motors and construction machinery.

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Loan losses threaten Banks to provide lower guidance and lay of thousands in what will be known as worst depression in Banking and financial services sector
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Every bubble ends up in severe meltdowns. It happened after the dot com bubble. It happened after the real estate bubble. It is happening in the banking and financial services sector.
READ MORE>>

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