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LARGE BANK MAY FAIL
WITHIN NEXT FEW MONTHS
WARNS HARVARD PROFESSOR

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August 19, 2008.  A Harvard Economics professor, Kenneth Rogoff, warns that a large bank may fail within the next few months.   He explains that it follows patterns of economic processes that "the financial sector needs to shrink.  I don't think that simply having a couple of medium sized banks and a couple of small banks going under" is going to finish the inevitable economic course of events.

Amidst reports that home lenders may become nationalized, shares of Fannie Mae and Freddie Mac fell, and Rogoff continued his economic predictions during a conference in Singapore:  "Like any shrinking industry, we are going to see the exit of some major players . . . we're going to see a consolidation even among the major investment banks."

The effects of the economy on individuals is looming as consumers suffer massive layoffs, soaring prices in food, clothing, and shelter, along with astronomical gas prices, and defaults on mortgages causing many to lose their homes and being unable to pay credit cards.

WORSE IS YET TO COME

Rogoff states "the worse it yet to come"  because the credit crisis is headed downward and will worsen as a large bank will inevitably collapse under the economic pressure.

However, the large bank will most probably cut its spiraling losses by consolidating with other banks to protect the remaining profits before hitting bottom.

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Copyright © 2008/5008. All Rights Reserved.
5008 + 1.5 x 10 ¹⁰ Universal  | Chérie Phillips, Editor

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