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PRESS RELEASE


Wall Street Writes the Obituaries for U.S. Banks

June 23, 2008 (EIRNS)—While Wall Street and other media don't want to admit the reality of the systemic financial collapse, the many obituaries for U.S. banks that fill their pages make it hard to miss. Things have become tough in the "post Bear Stearns" environment, the Wall Street Journal complains today.

The Urinal and the Financial Times today document 10% personnel cutbacks at both Citibank and Goldman Sachs, with similar action expected at other investment banks. And, given big losses, investors are now very skittish about putting money into those entities, refusing to participate in capital-raising transactions. "Investing in a bank right now means investing in a large portfolio of loans that are essentially a black box," one portfolio manager remarked. Given investors' reluctance to put in money, banks may have to come up with "sweeter terms," which, however, will also raise the cost of those deals.

"More Bank Bailouts Ahead?" is the headline on another WSJ article today, which warns that if lenders can't find buyers, or raise needed capital, the FDIC "could be overwhelmed." The Fed's decision to take on $29 billion of Bear Stearns assets "may soon look like chicken feed," the Urinal moans. While the thousands of struggling mid-sized banks don't pose the same kind of threat as Bear Stearns did, the problem is that the "other usual escape routes" available to those banks "are narrowing." It's getting harder and harder to tap either new or existing shareholders for new funds to replenish bank capital.