August 20, 2008
Merrill Lynch, Wachovia and other financial companies are at risk of failure as the cost of raising capital soars at a time when the banks need to pay settlements over auction rate securities, David Kotok, chairman & chief investment officer from Cumberland Advisors, told CNBC Monday.
“I think the financial problem is half way through the cycle … there’s another shoe to drop ahead of us and it could be more severe,” Kotok told “Worldwide Exchange.”
The cash companies need to shore up bad investments, “is up to about $50 billion and will probably top $100 billion before it’s over,” he added.
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