April 8, 2008 – 9:21 am


When it rains it pours and pours and just when the economy needs liquidity injections to stave off the credit crunch the liquidity is drained:


Bank holding companies including Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. have the thinnest safety cushion against losses in seven years.

The margin may erode further in coming weeks. Credit ratings on $704 billion of bonds have been cut this year following the collapse of the U.S. housing market.

In addition some companies now find they need to soak up some of that insufficient liquidity:

Tribune Co. and Dole Foods Co. may need to draw down on bank lines to avoid default, causing a new drain on bank capital, according to Morgan Stanley analysts.

Now what’s a bank to do — feed a fever or starve a cold? And ask yourself this: as the credit crisis deepens, will the Tribunes and Doles be the ones to come-a-tappin’ on the bank window?


  1. 3 Trackback(s)

  2. Apr 8, 2008: Bank-Implode! » Citigroup - $46.6B
  3. Apr 8, 2008: Bank-Implode! » Bank of America - $7.2B
  4. Apr 8, 2008: Bank-Implode! » Wells Fargo - $1.4B

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