GEAB said it in March 2007: "Private banks such as Goldman Sachs could end up in various judicial procedures"
- Excerpt GEAB N°13 (March 16, 2007)
GEAB said it in March 2007: "Private banks such as Goldman Sachs could end up in various judicial procedures"
Recommendations / Alert on financial sector
LEAP/E2020 advises to get out of the financial sector in general and to do it as soon as possible when it comes to the US (or operating in the US) financial sector.
As described above in the present GEAB, the converging consequences of the subprime mortgage crisis are about to hit hard and durably on all credit and banking institutions involved (that is to say nearly every large financial institution in the US, as well as every big international bank, the US Fed’s « primary dealers » in particular). The largest institutions are likely to be affected via a significant degradation of their balance sheets (i.e. their profits); meanwhile medium-size institutions directly run the risk to file for bankruptcy. Moreover, as it is already the case for a number of subprime mortgage lenders such as New Century or for some private banks such as Goldman Sachs or Lehman Brothers, LEAP/E2020 estimates very likely that a number of these institutions end up into various judicial proceedings. Apart from the judicial consequences for large banks involved in bankruptcies, it is likely that subprime lenders get suspected of mismanagement by federal or state authorities and involve the final responsibility of those banks which mixed up everything (shareholders, costumers, advisers, retailers…).
In any event and for the months to come, this sector is rated to « high risk » by LEAP/E2020.
Mardi 27 Avril 2010
http://www.leap2020.eu
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