All indications are that regional banks are not long for this Earth, as they don't qualify as "too big to fail" like Citigroup or Bank of America. The march off the cliff is being led by Regions Bank, Huntington Bank and Fifth Third Bank. Options traders are putting mid-February contracts on Fifth Third at 20 cents a share, folks. Right now, you could buy the 12th largest bank in the US for less than a billion.
Either mass nationalization or mass failure is imminent for a number of regional banks, within a matter of months, maybe weeks. Obama's econ team is going to have to decide who lives or who dies, because the entire sector is insolvent. Obama is going to have a draw a line in the sand before Easter...maybe before St. Patrick's Day...possibly before President's Day.
The promise of future bailout billions are the only thing keeping the entire financial industry afloat right now. That's it. Eventually Obama has to come up with the money or shut the banks down.
Pretty soon he'll have no choice. Eight million people work in the financial sector. The number working two years from now will be a fraction of that.
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