Today's Article
Billionaire investor
Wilbur Ross says
that medium-sized
banks may be the
next economic
bubble to burst.
Wilbur Ross says
that medium-sized
banks may be the
next economic
bubble to burst.
The American Spark
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Billionaire: Several U.S. Banks May Soon Go Bust
By Cliff Montgomery - Mar. 10th, 2008
Billionaire investor Wilbur Ross said today that America's current slide toward economic depression is different
than previous crashes, in that no U.S. banks have yet gone under. But he feels that may soon change.
"I think that's going to be the next wave and--coupled with problems in the commercial real estate market--I
think they'll be the next bubbles that burst," declared the chairman/CEO of W. L. Ross and Company on
CNBC's "Squawk Box" during an exclusive interview.
He then was asked point-blank if that meant big banks soon would be in jeopardy.
"I think that the big banks won't fail in the sense that they will go to zero and depositors would lose money,
[because] I think the Fed and other regulators will make things happen," said Ross.
"I think it's the medium-sized banks [that will be in trouble], and particularly some of those that got
overextended with the subprime and other kind of mortgage debt. I think those are the ones that had the
serious mismatch, making 20- and 30-year loans based on 90-day deposits," he added.
He appears not to have mentioned the "elephant in the living room," something most other Americans know to
be a certain truth: That when those at the bottom of the economic ladder are working harder and harder but
making less and ever less, numerous bankruptcies and foreclosures are inevitable. And when those huge
economic contractions finally occur, it is equally inevitable that they will soon destroy everyone else's financial
future as well.
Ross' views are reminding many of those recently expressed by Federal Reserve Chairman Ben Bernanke,
who stated at a Feb. 28th Senate committee hearing that a number of regional banks with heavy investments
in real estate may shut their doors.
Regardless, Ross told CNBC interviewers that the American economy probably won't get back its luster any
time soon.
"I think at best we're in for stagflation," Ross stated, pointing out that America now suffers from a nasty
combination of weak economic growth and higher inflation.
"I think the consumer has been tapped out for quite a while, and is frightened by the poverty effect of seeing
the house go down," he added.
Like what you're reading so far? Then why not order a full year (52 issues) of the The American Spark
e-newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!
By Cliff Montgomery - Mar. 10th, 2008
Billionaire investor Wilbur Ross said today that America's current slide toward economic depression is different
than previous crashes, in that no U.S. banks have yet gone under. But he feels that may soon change.
"I think that's going to be the next wave and--coupled with problems in the commercial real estate market--I
think they'll be the next bubbles that burst," declared the chairman/CEO of W. L. Ross and Company on
CNBC's "Squawk Box" during an exclusive interview.
He then was asked point-blank if that meant big banks soon would be in jeopardy.
"I think that the big banks won't fail in the sense that they will go to zero and depositors would lose money,
[because] I think the Fed and other regulators will make things happen," said Ross.
"I think it's the medium-sized banks [that will be in trouble], and particularly some of those that got
overextended with the subprime and other kind of mortgage debt. I think those are the ones that had the
serious mismatch, making 20- and 30-year loans based on 90-day deposits," he added.
He appears not to have mentioned the "elephant in the living room," something most other Americans know to
be a certain truth: That when those at the bottom of the economic ladder are working harder and harder but
making less and ever less, numerous bankruptcies and foreclosures are inevitable. And when those huge
economic contractions finally occur, it is equally inevitable that they will soon destroy everyone else's financial
future as well.
Ross' views are reminding many of those recently expressed by Federal Reserve Chairman Ben Bernanke,
who stated at a Feb. 28th Senate committee hearing that a number of regional banks with heavy investments
in real estate may shut their doors.
Regardless, Ross told CNBC interviewers that the American economy probably won't get back its luster any
time soon.
"I think at best we're in for stagflation," Ross stated, pointing out that America now suffers from a nasty
combination of weak economic growth and higher inflation.
"I think the consumer has been tapped out for quite a while, and is frightened by the poverty effect of seeing
the house go down," he added.
Like what you're reading so far? Then why not order a full year (52 issues) of the The American Spark
e-newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!