Politics | 09/15/2008 7:30 am

Wilbur Ross Tells CNBC That 'A Thousand Regional Banks Could Fail,' FDIC Basics For Depositors

By The Staff at wowOwow.com

In an exclusive interview, Wilbur Ross tells CNBC that "possibly a thousand banks will close." Ross, the founder of private equity firm WL Ross & Company, is a billionaire investor who specializes in turning around underperforming companies. He is a respected commentator and prognosticator on financial matters.

Responding to the dramatic turn of events on Wall Street wherein 150+-year-old Lehman Brothers is preparing for bankruptcy, Merrill Lynch is bought by Bank of America in a forced marriage orchestrated by the Federal Reserve and insurance giant AIG is seeking capital, Ross sees the turmoil creeping into the commercial banking sector as the real estate and credit crisis continues to unwind.

While Ross sees investment opportunities for "vulture capitalists" in the coming banking carnage, for individual account holders at these regional banks, it is important that they take time to review where their money is and that all of their accounts fall under FDIC protection. The FDIC has online information to help depositors make sure their accounts are in FDIC-protected institutions and instruments and that they each fall under the $100,000 limit.

See the entire interview and video by clicking here.

FDIC Insurance Basics can be found by clicking here.

Read more about: Banking, CNBC, Credit Crisis, FDIC Basics, Financial, News, Wall Street, Wilbur Ross

206 Reader Comments (so far…) Sign In or Register to comment

http://www.nytimes.com/2008/09/15/opinion/15krugman.html?ref=todayspaper Krugman’s article in today’s Times.

By phyllis Doyle Pepe on 09/15/2008 9:36 am

e-mail alert

Read the article Phyllis and when he ended with”And so here we are, with Mr. Paulson apparently feeling that playing Russian roulette with the U.S. financial system was his best option. Yikes.” That is supposed to make me feel comfortable like some wowers are telling us?

By Jeannot Kensinger on 09/15/2008 11:29 am

e-mail alert

“And you are suggesting after EIGHT years of Republican control and a country on the brink of a Depression, the Democrats should run on WHAT exactly, if not the disaster 8 years of Republicans has left us with? I suppose we could run like the Republicans, avoid all talk of economy, war and healthcare and stick to fanning the culture war fire.” By DeBúrca obj on 09/15/2008 9:14 am “Private profits, socialized losses. Corporate welfare but to the average person it’s every man for himself.” By DeBúrca obj on 09/15/2008 9:11 am I just thought those posts bore repeating. Thanks DeB.

By Sherrie Crews on 09/15/2008 9:49 am

e-mail alert

Sherrie—I suppose we should be dumbing it down to the level of a mayor from Alaska? Yeah right! and I second the thank De B also. ;-)

By Frank Peterson on 09/15/2008 10:11 am

Frank Thanks a lot. There is no room here for discussion of opinions? What?

By Frannie Em on 09/15/2008 3:01 pm

e-mail alert

Exactly— :-)

By Frank Peterson on 09/15/2008 3:09 pm

Frank No, not exactly. I meant that if there is a dissenting opinion, it is considered ‘dumbing down?’. I don’t get that.

By Frannie Em on 09/15/2008 3:21 pm

e-mail alert

No I mis-phrased that badly Frannie just me with a dumb on

By Frank Peterson on 09/15/2008 4:15 pm

Hi Sherrie, Please provide credible evidence that the country is on the brink of a Depression.

By K O on 09/15/2008 10:35 am

e-mail alert

Kitty Thank you. We have some tough times ahead, so does the rest of the world. We are not in this alone. People need to keep their heads and get busy dealing with the problem on an individual basis. I am with you. It is irresponsible to make such claims. I have read many of Krugman’s articles, and seen him on talk shows, albeit, he is intelligent, but his policies also shut the doors on many small businesses. He does a lot of doom and gloom and many times it is to present the vindication of his own opinion. I have learned a lot from him, but when he is on a talk show, the arrogance just drips off of him. Sometimes he seems almost snide. It is unbecoming of him and I wonder if it is to make up for his height. Even on Charlie Rose, he sits and pontificates at times. He doesn’t seem embarrassed about it at all. I always find that kind of ego fascinating.

By Frannie Em on 09/15/2008 3:00 pm

e-mail alert

Hi Frannie, I agree he’s a brilliant guy. I think Alan Greenspan is brilliant, too, but I don’t agree with everything he says. I don’t happen to agree with his analogy to 1931. I think that there are a myriad of issues that are not comparable. Market shake-ups frighten people, especially when they don’t have an understanding of the root causes and historical precedent. I’ve advised people through the corrections in the mid 70’s, ‘87, ‘92 and ‘01, as well as many smaller bumps and starts - and there is one commonality. Panic causes people to behave in a way that does not contribute to their financial well being. I’ve heard the doomsday song in the 70’s with rampant inflation; valuation, program trading and illiquidity in ‘87; the recession in ‘91; LTCM in the late 90’s; and the Internet bubble in 2002. The S&L crisis was going to decouple the system. Prognosticators scared my clients to death, and I have spend hours and hours and hours telling them that this was nothing new. From the railroad crash in the 1890’s to the crash in the 1920’s, 30%+ corrections are the rule - not the exception - around the end of every economic cycle. None have destroyed our economy yet, and I am confident that this, too, shall pass. That’s not to take anything away from the seriousness of the monitization of a huge demand-push overabundance of mortgage loans that will take years to work through the system. It took years to build this problem, and it won’t be solved in a day. But times like these require a hard look, a level head and and strong backbone. Unfortunately, those who get air time are always the ones screaming that the sky is falling. So far, it hasn’t, and odds are it won’t this time either. We’re still the stongest financial power in the world, and I think that, in addition to hearing doom and gloom, this side of the issue deserves to be represented, too.

By K O on 09/15/2008 9:53 pm

e-mail alert

Kitty I believe your assessment is correct. Remember ‘87? Everyone thought the world was going to end. I remember my friend had inherited several large amounts of blue chip stocks. She hadn’t paid anything for them, her broker advised her to sell, I asked her was she kidding? They are strong companies, hang on, they will come back, she sold, 9 months later they were doing even better. By selling she contributed to the panic. I mean, everyone has to take a look at their situation and do the right thing for themselves. As you said, this is serious, but if we keep our heads and stay focused, the nation can get through it. We have all been enjoying the excesses of the past 4 or so years since the the internet bubble. Everyone was wondering when the real estate bubble was going to burst, well it did, and big time. It could get worse, and the American people will be burdened more than it should. I want to see investigations. The ceo of Lehman Bros made over 100 mil last year. Give some of it back to people who lost their retirement. I found some interesting numbers and posted them on page 1. Top donors to Fannie Mae and Freddie Mac. Kitty, what do you think they should do to reform and regulate? How much, and when?

By Frannie Em on 09/15/2008 11:55 pm

e-mail alert

Hi Frannie, I sure do remember ‘87. The one good thing was about that day was the traders - usually screaming at the top of their lungs - were very quiet. Your reform and regulation question is the best one I’ve seen asked about this whole situation. In investment banking, I think that brokers should be better trained, and paid on an asset basis rather than commissions per transaction, and that securities analysts should be in different subsidiaries than broker/dealers. Rating agencies need to have their feet held to the fire - those AAA rated ARS were a joke, and I don’t know it for a fact, but I think the rating agencies were too cozy with the securities issuers. They should never be paid by the companies they’re rating. In commercial banking and thrifts, it’s probably a good idea to go back to the old 20% down, 30 year mortgage with housing expenses being no more than 30% of gross income in order to make the loan available for resale to FNMA/FHLMAC. Verification of income, tax returns, etc., should also be mandates for such a resale. Insurance? That’s a big one, and one I feel needs a major overhaul. I never let my clients buy a long term care policy without seeing a lawyer. There’s so much wrong with that system. Maybe they could pull poor old Eliot Spitzer out of retirement and give him the job. I don’t know. Time-wise, I think right now would be good. I just hope they don’t over regulate. It’s so predictable - first lax regulations, then too much. What do you think?

By K O on 09/16/2008 11:08 am

e-mail alert

Kitty and Frannie, This conversation is a good one. Kitty, do you have a financial blog? I would like to read your opinion on NAFTA and global market impacts.

By Hobo Questioning Almost Everything on 09/16/2008 11:23 am

e-mail alert

Hi QAE, Don’t have a financial blog, although I’m an intermittant guest on Mary Buffett’s. I am in favor of free trade, and with former Fed chief Paul Volker’s opinion with respect to solving the problem of disparity in income. “The best way of doing that is to remove what is essentially protectionism for those skilled workers in the United States who are helped by keeping out their competition,” and former Fed chief Alan Greenspan’s opinion that the U.S. education system is `’critical’ to help ‘cutting-edge technologies’ replace older industries that will be phased out over time.

By K O on 09/16/2008 2:03 pm