The time has come to wonder out loud if any of the big money center banks will be around in 60 days. BofA was hit hard again on Wall St., which in and of itself might only matter to BofA and the QC, except that the entire sector was also slapped into next week. Citi, BofA, Wells, and JP Morgan all shed at least a fifth of their value today.
We know that the feds are monitoring deposit outflows closely. Should the rest of this week show that money is leaving these institutions in a panic, we may wake up Monday with all of these banks in the hands of the federal government. Sound like doomsday? Pretty close.
I don’t know how an Obama administration can avoid such a response to the continued erosion of value at these institutions, not with what has gone before, not with the expectations that the feds can fix everything. It is almost like the new guys will be called on to prove themselves to be true masters of the bailout reflex, a la Hank Paulson.
Needless to say, such an event would permanently alter the trajectory of Charlotte, which has spent the past year trying to adjust to a slightly lessened overall role in the grand money center bank firmament. If what I am suggesting is possible happens, there will not be any money center banking. Period.
