Big banks like Citigroup and Bank of America are in deep trouble. Quite possibly, they are already zombie banks, their financial corpses animated by TARP billions and the promise of more billions from Obama in the future.
That's what makes today's earnings news from mid-size regional banks all the more depressing. Across the board, regional banks like KeyCorp, Comerica, Huntington, SunTrust, BB&T and Fifth Third (especially Fifth Third) announced staggering losses this morning.
How many of these banks are zombie banks? I'm betting more than you think. The entire financial system is collapsing around us. Many of these banks won't be around in year, I'm thinking. Massive consolidation is coming in the industry in 2009 out of necessity, and it will involve a number of regional banks like this being snapped up the way Cleveland's National City was.
Look for banks to take another round of stock hammerings today and tomorrow.
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