"Oh no! They're nationalizing my bank"

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    Mar 02, 2009 11:05 PM GMT
    This seems to be an anguished cry by bankers and financiers. Oh boo hoo! Personally, I feel the bankers et al. had their chance to run their businesses and THEY FAILED. Now the taxpayers have to move in and take charge. Too bad if they lose control of their banks until we get this mess straightened out.
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    Mar 03, 2009 1:10 AM GMT
    Caslon, I am with you 1000%.

    The only bail outs from failed banks should be depositors covered under FDIC insurance to $250,000.

    Shareholders should wiped out and bondholders entitled to whatever (if anything) is left after depositors and the government are paid back. Insolvent banks should be wiped out just as any other bankrupt firm would be. The lack of clarity perpetuated by the government's unwillingness to bite the bullet on this point is delaying the reckoning that must precede any hope of recovering a functioning banking system.
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    Mar 03, 2009 1:23 AM GMT
    I am not saying that a bank should be allowed to fail necessarily. I am just contemptuous of those who declaim "nationalization" as if it were unamerican and some kind of diabolical socialism. Well, if the bankers had taken care of their banks, fine. But since they so spectacularly failed at their jobs, then I dont think they have any place to criticize the tactics that we now have to use to save the whole economy.
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    Mar 03, 2009 1:45 AM GMT
    What I think stinks is that there are some good banks that saw this coming and stayed away from it. These banks get to watch their competition get a check from the government.

    The stockholders of the bailout banks should be the first to pay - let the Board of Directors seek damages against the executives in court to get back payouts and bonuses. When these banks go under, if they owe other banks - turn over good assests to pay the bill. Lots of people will loose their jobs but have to start working for the other banks.

    All that will be left are the toxic assets and these will go back to the Fed. The Gov't borrows to cover the losses at the Fed or increases interest rates to cover the losses.

    This allows bailout banks to tank and get absorbed by smarter banks - which is better off for the economy. The gov't(taxpayers) still ends up paying - but at least bad business gets displaced by good. AND gov't stays out of day-to-day banking ownership.

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    Mar 03, 2009 1:56 AM GMT
    OHhiker saidThe stockholders of the bailout banks should be the first to pay - let the Board of Directors seek damages against the executives in court to get back payouts and bonuses. When these banks go under, if they owe other banks - turn over good assests to pay the bill. Lots of people will loose their jobs but have to start working for the other banks.

    In theory, that's how corporations are supposed to work. They never do. The Boards of Directors should also be assessed personal liabilities for failed policies they nominally permitted, since the executives were chosen & served at their pleasure. But most boards are manipulated by the executive management, and just nod & smile at annual meetings, so they can get their monetary compensation for doing absolutely nothing but look good.

    As for the banks, now's the time for another President Andrew Jackson, who hated bankers, and would have hung them all if he had the chance. I'm all for free enterprise, but throughout US history bankers have proven themselves unworthy of the public trust. I say hang them and let banking become a government function.
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    Mar 03, 2009 2:19 AM GMT
    OHhiker saidWhat I think stinks is that there are some good banks that saw this coming and stayed away from it. These banks get to watch their competition get a check from the government.

    I think it is just a bunch of bank executives and their political supporters who dont want to share/lose any control of their banks, even while they take public money. Very much like the banks did with the first $350 billion. So they are using the buzz words "nationalization" and "socialism" to try to scare public support away from restraints, conditions, and control on any public money they get now. Oh boo hoo.....let them be nationalized. (How do you say that in French...so I put it up next to "let them eat cake"?) They can be reprivatized after they are stabilized and have paid the taxpayers back. After a dose of nationalization, maybe the bankers will pay more attention to their banks and less to Brickbreaker on their Blackberries.

    I have absolutely postively no sympathy for these CEOs. None! Nor for any Republicans or their rube supporters who cant see that some public oversight is necessary.

    animal
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    Mar 03, 2009 2:24 AM GMT
    Banking has a number of business lines:
    Loans
    Savings
    Checking
    Electronic Fund Transfer ( ATM/VISA/MC)

    Savings and Checking accounts are not really something that the government needs to get involved in. Loans are often based on money the banks are getting not from saving accounts, but from loans from the FED.

    Lets seperate out the gov't loans as it's own entity with gov't risk being set by guidelines from the Fed.

    Private banks should loan from private funds.

    EFT was once a special service, but now I think it has become intrinsic to what we think of as money. Now every time we move money there is a middle man standing there taking 3%, an ATM fee, or some other dip that ads up to big profit. Some business profit margins are too tight to consider a 3% hit. Plus, companies pay direct deposit so you have to pay banking fees just to have an account to get your money.

    I think this needs to be pulled into the government and all EFT services should be run by a gov't agency much like the post office. Wouldn't it be nice if when all vendors accept your VISA, the charge was based on a per-transaction basic fee of $.42. Not 3%. How about getting money from any ATM is free ( except for taxes, of course)?
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    Mar 03, 2009 2:32 AM GMT
    I am all for nationalization of the banks
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    Mar 03, 2009 2:37 AM GMT
    Yeah, I hear that. For the last couple of years, most of my income has come in the form of credit card charges. Those "transaction" fees really add up! What looks like one transaction to you or I turns into three or four transactions when they tote up the fees.

    verify your credit card cha CHING
    transfer the money out of your account cha CHING
    transfer the money into my account cha CHING

    oh, and the money floats around in limbo for three to seven days between you and me... can't help suspecting that somebody is skimming a few cents interest on it during that time...
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    Mar 03, 2009 3:09 AM GMT
    I find it fun watching the Right scream out that nationalization = socialism, communism, or fascism. However, I should not make generalizations, it is mainly Fox News analysts.
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    Mar 03, 2009 1:18 PM GMT
    Pinny saidI find it fun watching the Right scream out that nationalization = socialism, communism, or fascism. However, I should not make generalizations, it is mainly Fox News analysts.


    Some republicans are calling for temporary nationalization of those banks that are in the worse shape. Strangely the Obama economic team is still resisting this. The banks such as Citigroup could have their good parts sold off.

    When the government converts its' preferred shares in Citigroup to common shares, it will own 40% of the company. That for all intents and purposes is a nationalization.

    Here is an article from the latest "Economist" about the benefits of nationalization.

    http://www.economist.com/displaystory.cfm?story_id=13185284

  • Timbales

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    Mar 03, 2009 1:40 PM GMT
    political-pictures-henry-paulson-banks-b
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    Mar 03, 2009 2:05 PM GMT
    YAY!