Business Insider: Chris Whalen, of Institutional Risk Analytics, has dire predictions for the financial system because of the problems in the mortgage securitization process and, more recently, problems with foreclosure processing.Chris Whalen is recognized as one the biggest bank bears in foreclosure-gate.
At a recent conference, Whalen said the foreclosure crisis would make 2008 look like a cakewalk (via Prag Cap):
“The U.S. banking industry is entering a new period of crisis where operating costs are rising dramatically due to foreclosures and defaults. We are less than ¼ of the way through the foreclosure process.”
Whalen says subprime losses never really showed up on balance sheets. But a coming wave of foreclosures will make them a reality. At a time when banks are already stressed, these rising operational costs will cause bankruptcy.
Even without foreclosure-gate banks were screwed. As the government stalls the clear out of toxic assets, bank liabilities will rise even more. See the show at Business Insider.….
