Under what authority does this guy think the government should do this? I’ve read the US Constitution and I never saw anything that said some companies are too big to fail and therefore the government can take them over at any time and run them.
I know what you are saying but Chris Whalen is probably the best analyst on the banking system I have ever read. This article by Blodgett probably is based on Chris’s analysis from a few months ago. I read it and decided to reduce our client’s exposure to BAC bonds based on it.
Whalen’s business is:
http://www.institutionalriskanalytics.com/team.html
I think his BAC report is still on the site. Its an amazing read. Don’t look at this as a political issue but as a consumer one. Chris is basically writing that the financial and economic crisis is not going to be solved until the large bank balance sheets are cleaned out of the bad mortgages still on the books. If we had utilized an RTC-like approach three years ago we would have been a lot better off now.
Dodd-Frank.
Banks operate under a federal charter. That is why deposits can and are insured by the Government at no risk to the depositor. In exchange, they are heavily regulated. If they are too weak to continue, the feds can take them over. It happens all the time. The BoA situation is only notable because of the size of the bank.
If Obama can do this, what is to stop him from Seizing Microsoft and "restructuring" them to free up some of the revenue needed at BofA, FannieMae, or Kenya. You know, it's all in the interest of spreading the wealth, fairness, social justice, and all that.