roh-oh. Moody’s downgrades three US banks

[dixiegrrrrl]

That's gonna leave a mark.....

Moody’s downgraded the credit ratings of Bank of America, Citigroup and Wells Fargo, three of the biggest US banks, over concerns that the US government would be less likely to rescue the lenders if they faced failure.

“Moody’s believes that the government is likely to continue to provide some level of support to systemically important financial institutions. However, it is also more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled, as the risks of contagion become less acute,” the ratings agency wrote on Wednesday.

http://www.ft.com/cms/s/0/43b10bde-e478-11e0-92a3-00144feabdc0.html#axzz1Yc6Tv8oG

That part where they wrote the government is "less likely" to bail out banks?
It should read " not at all ABLE to bail out this time".

Gee, didn't Buffet just buy 5 billion of BAC stock???

[xchrom]

1. wells fargo?!?! -- oh now that's juicey. the other two were expected.

but i thought wells would have been investigated for drug money laundering years ago -- but that never happened.

[dixiegrrrrl]

2. Theft by banks, no problem. Failure to hold onto enough of the money...problem.

amazing, ain't it?

[xchrom]

3. +1

[Warpy]

4. They all overexpanded in the 90s, especially BoA

Instead of rescuing them with cash that will end up in executive pockets, the next step should be temporarily nationalizing them, shedding unprofitable divisions (like Countrywide and Merrill Lynch at BoA), reinstituting Glass Steagall and generally turning them into BANKS instead of financial octopi.

At the same time, they'd smash that corrupt corporate culture they've all given rise to.

Letting them simply fail is not an option, they'd take too much with them.

[golfguru]

5. "reinstituting Glass Steagall" -- yes!

imho that was the start of the MBS & derivatives which is the banks gambling with our deposits, and if they lose, ask for TARP from taxpayers.