Alright. This speculation carries some weight. Kenneth Rogoff, former head of the International Monetary Fund thinks the biggest banks in America are vulnerable to failure of IndyMac proportions. In fact, he thinks some of the big guys will inevitably fall.
Yikes. De-press-ing!
Here’s more, from Bloomberg.com:
- Credit market turmoil has driven the U.S. into a recession and may topple some of the nation’s biggest banks, said Kenneth Rogoff, former chief economist at the International Monetary Fund.
- “The worst is yet to come in the U.S.,” Rogoff, a Harvard University professor of economics, said in an interview in Singapore today.” The financial sector needs to shrink; I don’t think simply having a couple of medium-sized banks and a couple of small banks going under is going to do the job.”
- The U.S. housing slump has triggered more than $500 billion of credit market losses for banks globally and led to the collapse and sale of Bear Stearns Cos., the fifth-largest U.S. securities firm. Rogoff, 55, said the government should nationalize Fannie Mae and Freddie Mac, the nation’s biggest mortgage-finance companies, which have lost more than 80 percent of market value this year.
Read the full story here.
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