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

“”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,” I agree with that (well sort of), and pleased that you put that up!!!! NOW, we can get rid of the ‘skilled’ CEO’s’ who get huge retirement bonuses, EVEN when the company goes bankrupt!!!!! Talk about protectionism!!!!! If the average person was caught in a situation where they hid the facts, lied on purpose, and then went to play golf while everything he was responsible fell apart…he would get FIRED, with NO unemployment insurance, and the company he worked for might even SUE, or have him thrown in jail for something! Talk about ‘disparity’! If you have a BIG title, you can get away with more of the unethical, and get PAID for it, to boot! WOW!

By Patty E on 09/16/2008 8:21 pm

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Thanks Kitty, I’ll make time to look at Mary’s blog, Adding to Greenspan’s opinion, I buy into the idea that we need to consider returning back to the basic for first level education and reintroduce arts and music. Studies show the removal of arts and music in school don’t allow the left and right brain equal opportunity. This would encourage our children to return to a level of innovative thinking. The topic is interesting.

By Hobo Questioning Almost Everything on 09/16/2008 8:21 pm

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You know, this is based only on my observation, but nearly all the brainiac mathematicians I know play the piano. There seems to be something to that premise, though I haven’t the faintest idea how to substantiate it other than the fact that I know a lot of people from Cal Tech and MIT - and they ALL play the piano. That is interesting, isn’t it?

By K O on 09/17/2008 3:07 pm

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The topic has been bubbling to the surface with data backing, I am interested in supporting a serious proposal should it get that far. Can you speak about a levered portfolio of securities?

By Hobo Questioning Almost Everything on 09/18/2008 9:12 am

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Kitty Thanks for the great answer. I am not that conversant in the state of the regulations to be able to contribute to specifics on a solution. I like everything that you have said. I totally agree with the 20% down and mortgage with housing expenses being no more than 30% of gross income, as well as verification etc. Those are all the things I had to do to get a mortgage. Yes, everyone has gotten too cozy with each other. Like there is no insider trading? Many of them got rich at the speed of light. But you know what a skeptic I am about it. I couldn’t agree more that the insurance business needs an overhaul. My husband and I were talking about long term care insurance the other day, and figured I would call our agent and get more info. I guess I should start researching the problems associated with it. I can’t believe that they did not require much verification. That is astounding to me. First it was the ease of getting credit cards, they even send them to high school students. If someone is not a great payer, their account gets sold to another bank. Then the original contract of low interest no longer is in effect. This happens to young people all the time, and then they are paying 33%. Overregulation under that guise of punishing the republicans will only lead to more disaster. It will slow down entrepreneurship, which at this time, would be a disaster for our country. We need to create more jobs. Whether it be in green industry or whatever, Americans need jobs.

By Frannie Em on 09/16/2008 8:33 pm

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Frannie - you said that mucho better than me. I’m very skeptical about the new age of the 401 investment “industry”. I wonder who’s minding that cookie jar.

By Hobo Questioning Almost Everything on 09/16/2008 9:08 pm

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QAE The industry is too opaque. I am a skeptic after watching so much dishonesty exposed. I want more exposure of process, so that we can get a clear idea what is happening, and so that these companies can’t cook their books so the CEOs come away with millions and the shareholders think everything is perfect, and they don’t need to ask for more information. Honestly? I don’t think anyone is minding any cookie jar so long as these companies keep donating to our House of Representatives and the Senate. This is a wake up call for our nation, instead of just investing in paper, we need to invest in manufacturing jobs that make something. Unfortunately, the call had to come in such a way it will effect the little guy more than anyone.

By Frannie Em on 09/16/2008 10:28 pm

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Hi Frannie, I’d recommend that guy we talked about before Todd Davidson from Davidson Financial in Torrance, who’s a lawyer and a financial planner on that long term care thing. I think I mentioned before that I know him well. He’s an honest guy, and I’m sure he’d do a no charge consultation for you. Thanks for your response. I love hearing from somebody who works in the world outside of finance and knows the realities of how all this theoretical economics really works. You’re a smartypants.

By K O on 09/17/2008 3:12 pm

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Kitty I don’t know if you are checking in anymore after today, but I just saw this and I appreciate the recommendation. I have put his name on file because we are thinking of changing financial advisors, so that is a good place to start. So thanks and back atcha smarty pants.

By Frannie Em on 09/19/2008 10:02 pm

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The million - scratch that - billion dollar question for the retirement investor is still “where is my money safe in today’s marker?” I understand not to carry a levered portfolio of securities but still not sure how they are analyzed. Turns out my hunch to stay out of the real estate market was right at least with regards to my personal goal. That mattress is looking better and better.

By Hobo Questioning Almost Everything on 09/18/2008 9:08 am

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I think one word says it all, GREED

By Sheryl S on 09/15/2008 9:55 am

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This link http://www4.fdic.gov/sdi/main.asp provides the latest information from the FDIC with respect to the financial status of all commercial banks and thrifts. Click “Update Report” for latest numbers. The first column is the sum of banks and thrifts. Note that the ratio of all non current loans and leases to total assets is 12.2%, and approximately 9.8% of those non current loans are fully or partially guaranteed by the US government.

By K O on 09/15/2008 10:07 am

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Kitty…Have you ever heard the phrase…’Figures can lie, and liars can figure’? And are you aware that Fannie and Freddie losses will NOT be reflected in the budget of the US? They will be ‘off the record’, so that when someone looks up websites, such as the one you have presented, ‘things’ will look better than they are? And Kitty, WHY should the government Guarantee that BIG Business has enough of my money and your money, to continue doing business? My point is that all these banks and mortgage companies were in the business to make money—-the free market means they make money, provide jobs, sell us stuff——so when they take the jobs to another country, and no one buys their product as a result, because they have no money to pay for it, WHY should government give them the money they ‘lost’ so that they can have huge bonuses for providing jobs elsewhere? Kitty, this whole fallout in the baking and business community, is more and more looking like Socialism—-where the Government is responsible for stabilizing corporations—-

By Patty E on 09/15/2008 10:55 am

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Hi Patty, I have indeed heard that phrase. The lack of belief (called lack of ‘transparency’ in finance) is, in my opinion, the reason that BofA bought Merrill Lynch in the 20’s after having offered $94 last year. People just don’t know what those mortgage backed securities are worth. How many are bad loans? How many need to written down? Written off? You’re so right, Patty, about government guaranteeing businesses. Lehman was rightly allowed to fail. Your points are well made.

By K O on 09/16/2008 6:49 pm

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Below is a link to a MarketWatch alert that fly into my mailbox the fistst time last night at 10:15pm. It has since been updated….but speaking of Corporate Welfare! This is a scathing commentary of Wall Street and its’ big players. http://www.marketwatch.com/News/Story/Story.aspx?guid={FCAED76B-A96E-4DA8-B381-FA579D24EA7D}&siteid=nbsh To know that those with the most money, are the ones who can afford the lawyers and accountants to secure grants from the government and its’ taxpayers, is another anomaly difficult to understand. While those for whom several of those programs were established for, are denied access to the money, because they forgot a period, at the end of a sentence—and it was sent back to them for correction—-over and over and over. Hardly seems logical, that there is often no ‘income cap’ for those seeking free money. Now that many have lost most of the value of their portfolio’s in the past several months, the valuation of their homes, and towns all over America have had to face a reduction in their budgets due to less Property Taxes being collected , it is my hope that the idea of ‘following the rules’ established by the SEC, the Treasury, et al, that ‘ethics’ can once again take priority over ‘greed’, and that punishment of entities such as hedge funds, and other manipulators, becomes popular again, . This past 8 years has been horrendous for the average person in America. I find it just as difficult to look around and say ‘well we have it better than a lot of other countries’, when the ideal is not to compare, in a “one up/one down” game so that we can feel better—-the ideal is to synergize all to the upside. Yet, this debacle created by greed and manipulation, may have made millionaires of some, but there are tentacles reaching out to the rest of the free world, and America has strangled and destroyed their economies, as well. Here I am thinking about the small town in Norway, who bought the packaged mortgage investments—and then went bankrupt—and was told by the one who sold them the ‘package’, ‘It’s not my problem’! The purposeful elimination of the middle class, which is what the past 8 years has been about, is somethng that we Americans should be ashamed about, for not taking action to stop it before it was too late.

By Patty E on 09/15/2008 10:41 am