I look even more perkie in my new doo. Speaking of doo ... nationalization of banks ...
Posted on 02/20/2009 5:36:49 AM PST by Zakeet
Katie Couric concluded a Thursday night look at the pros and cons of nationalizing banks by seeing the federal government as a comforting security blanket: “Nationalization may have a psychological impact as well, and Uncle Sam wrapping his arms around failing banks in this country might provide a big dose of confidence for the American consumer.”
Building to her pro-nationalization conclusion, Couric asserted that “everyone hopes to avoid what happened to Japan back in the 90s when the government pumped good money into bad banks, essentially keeping unhealthy financial institutions that weren't going to make it anyway on life support, crippling the economy” while, in contrast, “a government takeover of a bank last year” in Britain “ helped to temporarily calm fears in the financial markets there.”
Earlier in the CBS Evening News piece, Couric outlined the arguments for and against nationalization, ending with quite an understatement about the quality of government-provided customer service:
There are two sides to this coin. It could keep banks open and free up money so they can start lending again. But it could scare off private investors who will see government ownership as a sign of damaged goods, there could be more branch closings, and a government bureaucracy may not offer the best customer service.
(Excerpt) Read more at newsbusters.org ...
I look even more perkie in my new doo. Speaking of doo ... nationalization of banks ...
What is she smoking?
And as essentially a television news reader her opinions on the economy should be taken seriously why?
Ditz
She wants the government to take over banks and give them colonoscopies.
Good grief, the woman is an idiot!
If you think the stock market has tanked already, just watch it after the announcement of bank nationalization.
WARNING! WARNING! LUNATIC ON THE AIR!
F’n DOPE!
Questions That Need Addressing (concerning nationalization)
1. Are all US government guarantees of bank debt null and void? They should be. At a minimum, taxpayers are currently on the hook for $300 billion of Citigroup’s debt and $100 billion of Bank of America’s debt.
2. Are we going to end up creating another banks that is “too big to fail” out of this mess?
3. Will stock holders and preferred shareholders both be wiped out?
4. In a normal bankruptcy process one might expect to see significant changes in management. Will the nationalization process allow the clowns who wrecked these banks to stay in control? For how long? Under what capacity? And what person or committee gets to decide those questions?
5. Will the CDS liabilities be wiped out in entirety regardless of consequences? Clearly they should because otherwise taxpayers will be footing the bill. Unless this is spelled out I suspect measures will be taken to protect Goldman or whoever else is on the right side of those CDS and derivative contracts.
6. What kind of bidding process will be put in place and in what timeframe for the assets of the banks? Who decides and why?
http://globaleconomicanalysis.blogspot.com/2009/02/nationalization-revisited.html
Isn’t that the leftist mentality in a nutshell? All oogy and squishy and treating the nation’s economy like a big ole teddy bear ... People this sophomoric should be teaching kindergartners to fingerpaint, not making federal policy.
I just took a 8 Couric dump. Nothing record setting mind you but I’m no novice either.
Fixed it.
Because the perky Miss Couric is SUCH an expert on the banking industry and all other things financial.
It will for socialists.
Banks will be as solvent as SS.
The amplification of socialism deadens the air. (Hooray Rick Santelli!...fresh air piped in from another direction when the mine has caved in BUMP!)
SOCIALISTS ALL!
Something is missing in this nationalization hooplah. Normally one thinks of tangible shareholder equity as the cushion against bankruptcy. However, it is probably a better idea to think about the whole Tier 1 structure (bonds plus preferred) as the reserve against bank obligations. In that view, the diminished equity still has option value if the bank is allowed to earn its way out of bankruptcy, and in the event of liquidation, the depositors are still whole.
The point is, that liquidation should be avoided until it is necessary—that is, the entire Tier 1 cushion is gone. Otherwise, the shareholders are being robbed to the benefit of the bondholders, but there is no net benefit to the bank’s depositors.
Premature nationalization robs the equity holders of this chance (or put another way, seizes the value of their option on the assets). But, no one seems to be talking about it.
Komrade Kourick is korrect.
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