tag:blogger.com,1999:blog-8414824.post5911385700286488239..comments2023-10-29T05:07:35.038-04:00Comments on The Investment Linebacker: Strap Your Boots On, It's Coming: The Alt-A and Prime Mortgage CollapseTILBhttp://www.blogger.com/profile/04591223587285966659noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8414824.post-19432266159975729472008-08-07T23:45:00.000-04:002008-08-07T23:45:00.000-04:00wwbrock,I agree. The best societal outcome is for...wwbrock,<BR/><BR/>I agree. The best societal outcome is for the banks to survive organically by earning their way out this hole. I just happen to suspect that many won't and thus we will suffer some runs. Dilution and/or failures will be rampant. See my post on "The Unders Have it". <BR/><BR/>Frankly, if you are a large depositor, you are making what is basically a zero percent (or, in the case of CDs, a low single digit percent) loan to the bank, but for what? Why are you willing to take a weak bank's credit risk? <BR/><BR/>My suspicion is and continues to be that a slow-motion run on the bank is occuring at WaMu for this exact reason. <BR/><BR/>If WaMu goes under, which would be the largest bank failure in history by many multiples, you will see fear set in. I'm not sure how to handicap the outcome of that fear-mentality, but basically I would not want to own highly levered institutions that are perceived as relatively weak (WM, WB, LEH, NCC) under any circumstance for the time being. <BR/><BR/>My view on de novo banks is less societal and more capitalistic: I think they have an opportunity to earn enormous returns. The problem is the regulatory process takes 9-24 months, so unless you've been fairly proactive, it will take a while to get your bank up and running. <BR/><BR/>In any case, I appreciate the feedback.<BR/><BR/>-TTBTILBhttps://www.blogger.com/profile/04591223587285966659noreply@blogger.comtag:blogger.com,1999:blog-8414824.post-70318070842020551722008-08-07T08:27:00.000-04:002008-08-07T08:27:00.000-04:00Very well done article and analysis is right on. ...Very well done article and analysis is right on. The best option is for everyone to have faith in the system and give the banks time to earn their way out. If we start a run on the bank then we will certainly have many more problems to deal with and fix, which will include more regulation, which results in a greater expense to all Americans and will make it much harder for all banks including de novo banks to make a profit. I too would like to see more de novo banks!Anonymousnoreply@blogger.com