2

calculatedrisk.blogspot.com - 10/6/2008

Report: UK Government Considering Plan to Recapitalize Banks

— calculatedrisk.blogspot.com — From the Telegraph: Financial crisis: Government could take shares in high street banks Alistair Darling, the Chancellor,... could give the banks billions of pounds in return for shares in an emergency bailout plan to be enacted if the financial crisis ... (more) Report: UK Government Considering Plan to Recapitalize Banks

Comments vote downundo vote up self-evident found this 10/6/2008found this

1

interfluidity.powerblogs.com - 10/2/2008

How to recapitalize: the Semi-Swedish Solution

— interfluidity.powerblogs.com — So, you don't want to nationalize all the bad banks, and neither does Megan McCardle. After all,... America is not Sweden, we're heterogeneous and fractious and really gosh-darn big.... (more) How to recapitalize: the Semi-Swedish Solution

Comments vote downundo vote up naked capitalism found this 10/2/2008found this

Leave a Comment

links for 2008-10-09
Economist's View — There's No Easy Way Out of the Bubble - Vernon Smith Back to the Great Depression Debates - Econbrowser: In Praise of Bernanke - Economix TARP: a simple model - Worthwhile Canadian Initiative Taking Hard New Look at a Greenspan Legacy - NYTimes.com How to Recapitalize the Financial System - Greg Mankiw Bush Administration Needs Credibilty - Capital Gains and Games Taking Hard New Look at a Greenspan Legacy - NYTimes.com ...

Voluntary Debt for Government Equity: the Mankiw-Paulson Bank Bailout Plan
EconoSpeak — Greg Mankiw wrote yesterday: Some economists have proposed forcing these firms to go raise more capital from private sources. But how exactly can the government do that? It is not entirely clear how, as a legal matter, that can be accomplished. Perhaps regulators can twist the arms of the financial institutions. Call it the Tony Soprano approach. “Nice bank you have here. I wouldn’t want anything bad to happen to it.” Other economists have suggested that the government inject capital itself. That raises several questions. First, which firms? The government ...

Thursday's Daily News
Club for Growth — THE DAILY NEWS Will McCain Make the Investor Connection? - Larry Kudlow, RCM Fear Will Subside - Steve Forbes, Forbes Magazine John McCain Wants Your Mortgage - Wall Street Journal Editorial How to Recapitalize the Financial System - Greg Mankiw, Mankiw's Blog Blame Accounting Alchemy for Market Evaporation - Amity Shlaes, Bloomberg A Rescue Plan That Didn't - Tim Chapman, Townhall.com Treasury and a 'Reverse Auction' - Vernon Smith, ...

Links: Iceland, Leeson, China, Swaps, Yield Curve, etc.
Paul Kedrosky's Infectious Greed — ... out (Daily Mail) Glimmers of light showing in credit markets (Bloomberg) China exports to U.S. "small beer" for economy (Bloomberg) Iceland takes over biggest bank Kaupthing as entire banking system has now failed (Bloomberg) The living yield curve (Smart Money) What will the crisis mean for venture capital? (BusinessWeek) How to recapitalize the banking system (Mankiw) Former FDIC chairman Bill Isaac on getting fixes right (The Deal ...

How will partially nationalized banks behave?
Marginal Revolution — ... on the downside but loss of some potential upside gains).  The newly neutered "debtholders" still might not want the bank to be very active, as evidenced by the stagnant nature of some explicit current debt markets.  I hear this recurring voice: "Hey, you guys, just get stuff going again!"  It's an odd basis for corporate governance. I am not sure what is the proper way to model this set-up. Addendum: Greg Mankiw proposes non-voting shares.

Thursday links: thought and choice
Abnormal Returns — ... The U.S. is thinking about taking ownership stakes in banks.  (NYTimes.com, WSJ.com, Market Movers, CNNMoney.com, Bespoke) How best to inject capital into the banking system.  (Mankiw Blog) The credit markets remain under great stress.  (Calculated Risk, MarketBeat) Europe is less well-suited to confront the credit crisis.  ( ...

Henry Paulson, Meet Warren Buffett
The Baseline Scenario — ... to vote with its shares; many free-marketers think that would constitute undue and risky government interference in actual bank operations. Assuming that is a problem, the preferred shares could be created without voting rights. Greg Mankiw, former chairman of the Council of Economic Advisors under the current President Bush (and known to generations of students as author of a popular macroeconomics textbook), and no fan of government intervention, has proposed that the government co-invest with private investors like Warren Buffett so they benefit from the same terms that ...

Guest Post: A Non-Socialist Proposal to Help Recapitalize the Financial System
SCSUScholars — ... One of the major problems during the present financial crisis is the need inject capital into the banks. As Professor Greg Mankiw wrote yesterday, ...

Crazy Ass Market Randomosity
The Learning Curve by Muckdog — Well...  The market all over the place!  You go to the bathroom, and there's a 400 point swing in the DOW by the time you zip it up.  And you were here to SEE IT!  The 2002 Market Bottom Analogy.  Interesting.  As interesting as the bottom of a Jacksonville Jaguars cheerleader?  You be the judge! Greg Mankiw has thoughts on How to Recapitalize the Financial System.  Loss of wealth to weigh in on consumer spending.  I mentioned in the last entry that I was ...

Academics offer rescue plan advice; consensus emerging: recapitalize banks
The Emirates Economist — ... getting taken for a ride. ... Harvard University economist Gregory Mankiw, former chairman of the Council Economic Advisors under President George W. Bush, suggested that the government could set up a recapitalization plan that works like a matching grant. If a financial institution attracted new capital from private investors, it would be able to access an equal amount of government capital. "The private sector rather than the government would weed out the zombie firms," he wrote on his blog. ... Barry Eichengreen, an economic historian at the University of ...

Does not compute
winterspeak.com — The amount of drivel poured forth on the credit crisis is astonishing. It is obviously extremely difficult for academic economists to see what is really happening -- their ability to perceive truth is clouded by their training and priors. My alma mater's Greg Mankiw is a case in point: he's a scholar, a gentleman, and a smart guy, but still comes up with craziness like this: ...

Principles for Bailout Management
TRUTH ON THE MARKET — ... Any government bailout requires some picking of winners and losers, and bureaucrats in Washington simply don’t have access to (and wouldn’t be able to process, even if they could obtain) all the information needed to ensure that this is done in a way that maximizes wealth. In Hayekian terms, the bailout managers are expected to “utiliz[e] … knowledge which is not given anyone in its totality.” So how should we manage a bailout so as to minimize the risk of resource misallocation? Greg Mankiw suggests a promising approach under which the government would act as “a silent ...

Four more pieces on the current financial problem that I liked
Newmark's Door — Greg Mankiw: My Preferred Fiscal Stimulus (2/5) and  How to Recapitalize the Financial System (10/8/08). Niall Ferguson: "Keynes Can't Help Us Now" (2/6). Jonah Goldberg: "The Great Overreach" (2/6).