Bank Stocks Could Still Go To $0

Tim Geithner says his new bailout scheme carries “risk”, but he doesn’t really define what that means, in terms of downside to the taxpayer. Meanwhile, guys like Nouriel Roubini still think that with all the capital that will be plowed towards banks, it still won’t be enough to stave off nationalization.

A brief research report from Aquatoid Corp. argues that the bailout won’t be enough, and that there’s still a yawning gap between how much the banks actually need to fill in their balance sheets, and how much they’re likely to receive. The upshot: Many banks, as Roubini says, will still go to $0 and the US taxpayer will be left holding the bag.


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