‘Smart Trade Group’– [Banks To Blow Up Again]

June 18, 2009 - PRLog -- “Smart Trade Group” sources say that the Asian-based boutique broker is concerned that US banks may have to return to the Federal government for bailout funds once the credit card and commercial property market defaults begin to accelerate.

They reportedly believe that although credit card defaults are unlikely to have such a profound human cost when compared to mortgages and the resulting foreclosures after non-payment, they will have a very damaging effect on bank balance sheets.

“Smart Trade Group” remains convinced that the inability of borrowers in the commercial property market to refinance their commercial loans once sweetener rates reset will result in large losses on banks’ balance sheets. They also believe that rising unemployment in the US is forcing many to choose between paying their mortgages and their credit card bills and that mortgages are, somewhat understandably, winning out.

“Smart Trade Group” sources suggest that the firm also believes that US banks’ capital raising activities after the stress test results are aimed at facilitating the repayment of TARP funds so that they can be bailed out again without returning to the Federal government and drawing greater criticism from the American public.