May 5, 2009

"Stress Tests" May Show That The Big U.S. Banks Need More Cash
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The recent "Stress Tests" issued by the U.S. government in order to see how solvent or insolvent many of the biggest American banks are these days may have come back with some troubling figures recently. According to various media reports and banking analysts, Citibank, Bank of America, JP Morgan Chase, and Wells Fargo may need a lot more capital to remain in business.

Some banking analysts estimate that Bank of America may need anywhere from $60 to $100 billion to meet the minimum "required capital" requirements set by our government. In addition, some analysts think that Citibank may need at least $50 billion.

Also, some analysts (including Friedman Billing Ramsey & Egan-Jones) believe that Wells Fargo may need at least $66 billion, and JP Morgan Chase may need at least $33 billion. 

Sadly, these 4 banks are the 4 largest banks in America right now. Hopefully, these financial institutions can meet the minimum "required capital" guidelines or they may each need more bailouts in order to keep their doors open. 

Regardless, these banks (and many others) will need to sell off their prime real estate assets at any price possible in order to generate much needed cash. As a result, there may continue to be some excellent REO foreclosure invesment opportunities all over our great nation.

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