Bank Failure Day and Wall Street Paranoia
It’s Friday, which means the government is likely to announce the latest round of bank failures in the late afternoon. Calculated Risk expects commercial real
Jul 31, 2020769.2K Shares10.8M Views
It’s Friday, which means the government is likely to announce the latest round of bank failures in the late afternoon. Calculated Risk expectscommercial real estate to implode in 2009, meaning lots of small and regional banks may go under. So there’s something to look forward to.
But not all bank fears may be justified. The once-obscure Federal Home Loan Bank system — which consists of 12 regional banks that are a privately owned, government-chartered cooperative, consisting of 8,000 member financial firms — is under scrutiny now because of potential losses on toxic mortgage-backed securities, as we reportedThursday. However, not all of the regional banks are the same. The New York Federal Home Loan Bank today pointed us to a statementon its Website noting that it isn’t expecting any losses.
The worry for the Federal Home Loan Bank system is that some investors are engaging in rumormongering, in an effort to shortthe stock of member banks.
As the financial crisis intensifies, so does the fear on Wall Street, whether it’s justified or not.
Paolo Reyna
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Paolo Reyna is a writer and storyteller with a wide range of interests. He graduated from New York University with a Bachelor of Arts in Journalism and Media Studies.
Paolo enjoys writing about celebrity culture, gaming, visual arts, and events. He has a keen eye for trends in popular culture and an enthusiasm for exploring new ideas. Paolo's writing aims to inform and entertain while providing fresh perspectives on the topics that interest him most.
In his free time, he loves to travel, watch films, read books, and socialize with friends.
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