FBN’s Charlie Gasparino reports “there is a doomsday scenario floated by short sellers” in which a perfect storm of economic struggles could create a “massive problem” at which point “TARP 2 is not an impossibility.” According to Gasparino, “the Obama Administration is putting pressure on all the state AG’s working out the mortgage settlement” in order to avoid this “doomsday scenario.” Excerpt from the report can be found below, courtesy of Fox Business Network.
On the “doomsday scenario”:
“There clearly is a doomsday scenario floated by short sellers. They are talking about it in hush terms. There are four elements to this doomsday scenario and its impact on the bank balance sheets. The impact of Greece could cost banks billions, combine that with the mortgage settlement, the Fed MBS sales, and the double dip recession. You put all that together and you have a massive problem. This stuff is floating around and if this does materialize, TARP 2 is not an impossibility. FOX Business Network hears the Obama Administration is putting pressure on all the state AG’s working out the mortgage settlement to do it, do it fast, and don’t do it at the high end, because they know all this stuff is coming down.”