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Wednesday, February 25, 2009

 

bank nationalization deferred


amid wide variance of opinion, it became clearer yesterday in the testimony of ben bernanke that bank stress tests were not expected to lead to any nationalizations. that reinforces the view that the outcomes of bank stress tests are predetermined, and ratehr diminishes the hopes of some (including paul krugman) that the tests might be a trojan horse by which nationalization could be introduced.

apparently, at least right now -- regardless of whether you believe it the result of a quiet coup d'etat by the banks or the real circumspection (or panic) of regulatory authorities as to unintended consequences or both -- we're going to run the tail risk of sovereign debt and currency problems in the hopes that repeated capital injections see the banks and their bondholders through without realizing losses.

good luck to the united states.

UPDATE: more from calculated risk -- the stress tests are going to be a softball.

UPDATE: via clusterstock, megan mcardle contributes something to the conversation about what nationalization would look like.

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we had a pep rally lastnite and everybody is ready for the big game!

if you ever needed proof that the politicians are as clueless as the sheep, it was on display for the whole world. while many of us fight to save our jobs and homes, they were getting the presidents autograph. good lord.

 
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i watched a bit of it, ccd, and i have to say i don't think it's worthy of a lot of comment. nice speech, but words mean nothing now. washington still looks very much in denial of the extent of the problems, and very much interested in protecting fiefs and paying off patrons.

particularly pathetic was bobby jindal's vapid reality-denying response. if that's the best the republicans have to put forward, they really are fucked. "a form of nihilism" -- that squares exactly with what i believe the republican party has become. how anyone identifies what they are now with tradition or religion or morality, i have utterly no idea. to think that, you cannot be watching.

 
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If the largest banks, who are also Fed member banks, are nationalized, don't they become owned by the taxpayers? Therefore, wouldn't the taxpayers have a corresponding ownership interest in the Fed? If that is true, why would be charge our selves interest to print our own money, collect or earn that interest, then pay back interest in the form of income taxes to ourselves for the privilege? Nationalization would eliminate the need for the private cartel that is the Fed. by owning the Fed we can eliminate the Fed. Own the Fed! Nationalize the Fed member banks.

 
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i think the hope is, anon, to reprivatize them as quickly as possible. if you expect the banking system to become the united states department of banking, then maybe i'd agree. but it won't.

 
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The Republican party has finally become a Southern regional and prty of those that vote against their own best interests. That Jindal response was just sad. After the Obama speech, I don't know that I'd had said anything.

I love the idea of healthcare reform, but this is going to be crafted by healthcare vendor lobbyists and politicians (i.e. lawyers). Not a good combination for reforming something that should have been looked at 30 years ago.

 
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