Banker: Times to worsen
By Cheryl Berzanskis
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[FONT=Optima, Arial, Helvetica]Publication Date: 04/03/08[/FONT]
A man who grew up in Pampa and then made his fortune in banking warned Wednesday that the U.S. economy likely will worsen some while real-estate pledged loans and liquidity in the capital markets continue troubled times.
Gerald J. Ford, who lives in Dallas, spoke Wednesday at West Texas A & M University's Investment Series luncheon.
Ford is chairman of the board and principle shareholder of First Acceptance Corp., and Hilltop Holdings Inc. He serves as a director of McMoRan Exploration Co., Freeport-McMoRan Cooper and Gold Inc., and Scientific Games Corp.
Ford bought his first bank in 1975 and sold it for a profit of $80 million. Most recently, he sold Golden State Bancorp to Citigroup for $6 billion.
Ford, speaking from his perspective in financial services, said he expects a certain sequence of financial difficulties to work their way through the economy. He blamed greed, creative financing and a belief in the stability of housing prices for fueling much of the meltdown.
In terms of the capital markets, the U.S. government dealt with the Bear Stearns crisis appropriately, he said.
While he is not comforted by remarks from Washington nor encouraged by any of the three presidential candidates, Ford said he believes the economy needs government help.
It has happened before with Bear Stearns, the savings and loan rescue and the Depression, Ford said.
The Sunburst Room of the Amarillo Club was filled.
Attendee Dale Buckner, president of Asset Planning Group, said he learned more about the subprime industry.
"I enjoyed so much hearing from an expert about what's happening in the mortgage industry and the subprime mess we're in," he said.
Richard Ware, president of Amarillo National Bank and long-time friend of Ford, said many consider Ford the most successful banker of the last two decades.
"And I say that."