Follow WallStreetBlips on Twitter
On the Need to Leash and Collar Effectively Nationalized Banks
naked capitalism —
... and tell that congressman what changes I did expect. The company should divest or close activities not related to its essential public function. If Citigroup wants to continue to engage in proprietary trading, it should raise capital for the purpose from private sources. No one wants bank managers to be replaced by civil servants. But there are a lot of perfectly competent bank managers out there, even if there are a lot of incompetent bank executives. And from Wolf: Much of the debate [over nationalization] is semantic. But underneath it ...
Pink picks
FT Alphaville —
... Just months after unveiling the alleged fraud of up to $50bn perpetrated by Bernard Madoff, the SEC has brought a civil claim accusing Sir Allen of misappropriating at least $1.6bn in a decade-long pyramid scheme. If the allegations are true, the world has again been hit by a scam that suggests the architecture of international investment is in urgent need of overhaul. Opinion: To nationalise or not - that is the question Martin Wolf writes : Lindsey Graham, the Republican senator, Alan Greenspan, the former chairman of the US Federal Reserve, and James Baker, Ronald Reagan’s ...
How many banks?
Paul Krugman —
... the banks and, a couple years later, they were going again. So you’d think looking at it, Sweden looks like a good model. Here’s the problem; Sweden had like five banks. [LAUGHS] We’ve got thousands of banks. You know, the scale of the U.S. economy and the capital markets are so vast and the problems in terms of managing and overseeing anything of that scale, I think, would — our assessment was that it wouldn’t make sense. But are we really thinking about thousands of banks? Here’s Martin Wolf, today : The four biggest US commercial banks – JPMorgan Chase, Citigroup, Bank of ...
We Cannot Afford To Wait To Recapitalise US Banks (Letter To The FT)
The Baseline Scenario —
Martin Wolf: To Nationalize or Not?
Rolfe Winkler —
... Martin Wolf’s latest column is a fantastic analysis of our thus-far-impotent bank “rescue” strategy… ...
A Quick Note on Bank Liabilities
The Baseline Scenario —
... Citigroup were restructured - via bankruptcy, or via government conservatorship - in such a way that creditors did not get all their money back. (None of this applies to FDIC-insured deposits or to recently-issued senior debt that is explicitly guaranteed by the government.) They might be forced to convert debt for equity, or they might be stiffed altogether. The first-order concern is that this would have ripple effects that could take down other financial institutions. According to Martin Wolf, bank bonds comprise one quarter of all U.S. investment-grade ...
What would happen if bank bondholders were left to rot?
Marginal Revolution —
... Citigroup were restructured - via bankruptcy, or via
government conservatorship - in such a way that creditors did not get
all their money back. (None of this applies to FDIC-insured deposits or
to recently-issued senior debt that is explicitly guaranteed by the
government.) They might be forced to convert debt for equity, or they
might be stiffed altogether. The first-order concern is that this would
have ripple effects that could take down other financial institutions.
According to Martin Wolf,
bank bonds comprise one quarter of all U.S. investment-grade ...
Blinder: Nationalize?
Economist's View —
... : One objection you keep hearing to
nationalization
pre-privatization as part of a bank restructuring effort is that the US
financial system is just too big and complex. ... But are we really thinking
about thousands of banks? Here’s
Martin Wolf, today: ...
credit takes a turn for the worse
Decline and Fall of Western Civilization —
... Another possibility is simply that more and more people are thinking that the government may end up restructuring debt. Martin Wolf and ...
