Busted: Bankers and The Global Economy

July 6, 2008

Banks: Hungry for Profit at Any Cost

Troubled banks and financial firms want to make a profit by any means possible. There has been plenty of talk lately about how the nation’s largest banks and securities firms are looking to shed some of their assets. Citibank is one international bank holding company hungry for capital at any cost to investors.

To avoid hurting shareholders, banks and securities firms, facing escalating loan losses and pressure from federal regulators, are increasingly considering asset sales as a means to raise cash. The result has been a fire sale of rumors and behind the scenes chatter.

For the possible investor, you can bet that banks aren’t cutting into truly productive muscle. This provides a problem, not only for banking accountability, but for the reality of decent investment material. The market is definitely one of “let the buyer beware”.

Why are the banking firms letting the behind the scenes rumors out the door? That is part of the game. There are few qualified buyers out there. Bankers want the buyers to come to them first. Perhaps they can grub out a few more dollars for their precious assets.

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