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Big Short investor Michael Berry said extraordinary action by regulators to support regional banks should be enough to resolve the current crisis and stabilize financial markets. “In October 1907, the Knickerbocker Trust collapsed on risky bets, causing a panic. The other two soon crashed and it spread. “, Berry tweeted on Wednesday. “The stand was made last weekend.” More than a century ago, the financial crisis known as the “Panic of 1907″ erupted when there were massive runs on banks, including the Knickerbocker Trust. The crisis ended in just three weeks after JP Morgan, the founder of the bank that bears his name, pooled money with other financiers to bail out the banking system.The founder of Scion Asset Management appears to think history must repeat itself given the urgency and scope of the regulatory bailout. On Sunday night, two days after the Silicon Valley bank was seized, the government announced that all savers involved would get their money back and it would provide additional funding to troubled banks.Berry, known for naming the subprime mortgage crisis, said Monday evening that he expects the unfolding banking turmoil to end soon b no serious damage. “This crisis can be resolved very quickly. I don’t see any real danger here,” Berry wrote in a now-deleted tweet. Barry became famous for betting on mortgage-backed securities before the 2008 crisis. Berry was featured in Michael Lewis’ book The Big Short and the subsequent Oscar-winning film of the same name. Investors weren’t so sure Wednesday’s turmoil was over. The sell-off on Wall Street intensified as concerns spread beyond regional banks. Shares of Credit Suisse, a Swiss bank with large operations in the US and around the world, fell more than 20% to another all-time low.
Credit: www.cnbc.com /
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