Tim Geithner must nationalise some of America's biggest banks and take the total toll of the US bail-out to around $2 trillion, according to one of the world's most prominent economists.
By James Quinn Wall Street Correspondent
Last Updated: 1:12AM GMT 16 Feb 2009
Nouriel Roubini the man feted with having foreseen the financial crisis before almost any of his peers has warned that the US Treasury Secretary must go significantly further than his detail-light bail-out plan delivered last week, and argues that the Obama administration should move swiftly to take public ownership of those major US banks which are failing.
Professor Roubini, who worked with Mr Geithner in the Clinton administration, told The Daily Telegraph: "Many US banks are insolvent, even the major ones." While nationalisation is "a politically- charged decision" which needs to handled carefully, he said it needs to take place "sooner rather than later" for the sake of the wider economy.
Professor Roubini calculated that, on top of the existing $700bn (£491bn) of American taxpayers' money allocated to solving the banking crisis, Mr Geithner may need to ask the US Congress for between $1,000bn and $1,250bn in extra funds. "Sooner rather than later, they'll need more money," he added.
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Poop!
The moment any of the big banks are nationalized, people and institutions will move their money to these banks and there will be a MASSIVE run on every non-nationalized bank.
Think about it ... would you want your money in a non-gov’t backed bank? And the FDIC is bankrupt, so don't think they will reimburse you for your lost bank accounts.
Tim Geithner must nationalise some of America’s biggest banks
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before he does that he needs to put their CEOs in jail with Barney Frank and some of his boyfriends.