Shelby: ‘Dead’ Banks Should Close; Citigroup a ‘Problem Child’

Would senator shelby like to blame the U.A.W for the sun not coming up in the morning too?
according to him we are the fault for everything that is wrong in the auto buisness. This coming from a man who wants $915,000 to study catfish and other things put into the budget.

Throwing money down into zombie banks hasn’t brought Japan out of their recession since the early ’90′s, why do they think it would be ANY different here? Let them fail, let the good banks buy the assets of the bad, NOT the other way around with taxpayer money no less!!! This is perpetuating and subsidising a problem instead of choosing to solve it. Shelby has it right.

Senator Shelby is ridicules,,, this is a Senator that espoused the falsehood of Obama’s birth certificate… That somehow the President is not really the President…Geez!
As the man speaks, I am wondering how he even got elected as a Senator.
This is also a Senator who denounced the Recovery Stimulus less than 2 weeks ago and now “Hypocritically” supports the Omnibus bill which is nothing but pork earmarks and even more spending…
Although Republicans are responsible for 40% of the earmarks…
40… Republicans are about equal in actual amounts 669 million in earmarked money.
57… Democrats in for 677 million
Republicans are highest in earmark totals being responsible for 3 of the top 5 and 6 of the top 10 earmarks…
How can this be when Republicans supposedly are against Spending…???
Republican Senator Cochran at 76 million in earmark money and Republican McConnell and 75 million. The two highest… Isn’t it a bit hypocritical be FOR spending now but, not two weeks ago… ????

Waiting to hear if George Will uses “Mr.” to refer to President Obama.

let them die
we american taxpayers are sick of the socialized losses and privatized proftis that both the democrats and republicans have forced on us.

Sounds harsh but Sen. Shelby is absolutely right. I know that those banks, who did not engage in giving mortgages to just anyone but actually establishing clients’ ability to pay, are healthy. They may not be making as much as before this crisis but they’re healthy. Why do I have to pay for someone else’s bad choices and irresponsibilities? I am already giving to family and charitable organizations. I don’t think it’s right for the government to decide when, where, and to whom does my hard-earned money goes! Even USSR failed because of these socialist policies! Why are we taking a socilist approach on things when we already know it does not work? I don’t know! Maybe it is because we elected a “community organizer” whose intent is to socially engineer this nation! We will have to live with the consequences…

We can’t keep throwing money at bad banks…we need to close them or nationalize them. Or sell the banks to another bank, but that’s impossible but none of them have money to buy. One or the other. I’m a citibank card holder. I’m getting ready to payoff my card. I wouldn’t invest or bank at Citibank and I Think many customers feel the same way.

As usual, as long as the Liberals use the common buzz words, like ‘inherited’, ‘working people’, etc, they will be able to push all of the social programs they’ve wanted to enact for the last 40 years. The liberal media will give them a voice and the American sheeple will follow along just like they are supposed to. It’s sad, really.

Is Shelby for real? No wonder we have problems when we have loose cannons like him running around……and, while I have you, George, although I know you are related through corporate marriage, Stengel contributed as much as his magazine does lately…zippo. His comments about “investors” returning to the market…..sure in hell ain’t middle class (whoever they are now) investors……they aren’t playing the market right now…..too busy licking their wounds given them by “the investment gurus” who got them where they are now………..finally, regulate banks and regulate investment banks separately….they are two different worlds!!!

ooops …sorry, folks…the investment gurus who told them how and where to investment their forever lost 401k money…remember the 401K?

NeoConnies are out in force this morning. Look at’em posting their tinfoil hat theories, Obama is a Commie, Shelby is a Rhodes Scholar, and Rush is the Grand Poo-Pah of the GOP. Shake those Pom-Poms and gnash those teeth silly Connies. Nobody cares what you think except for your narrow little base of mouth breathers and droolers.

I say “LET THEM DIE”. We’ll take the hit and come out healthier!!

I think the entire country should follow in the foot steps of the great state of Alabama. It will be fun to live in the 1950’s

Are the republicans shorting the banks and thereby shorting the entire stock market and thereby shorting your retirement accounts?! What the!

Are the republicans shorting the banks and thereby shorting the entire stock market and thereby shorting your retirement accounts?! What the!
Posted by: Common Sense
The banks have been looted. shelby’s suggestion helps to clean up evidense and loose ends.

Communication involves active listening, and Obama does not have this skill.
He has the gift of obfuscating manipulation with no wisdom! :(
No spine Obama, just naive or a dangerous idealogue? Which-ever Americans are not as stupid as you think!
Fix the spending bill Barack! Walk the talk or resign!

All bow before the Great Speculator! He giveth and he taketh away.

Shelby belongs in an unemployment line.

Survival of the fittest and the best managed. Poorly managed mega banks are a drain on investments, on tax payer revenues and the TARP fund and Senator Shelby is right. Dead and dying banks should close. Just as the main street is suffering the brutal realities of capitalism, the mismanaged banks with a excessively paid executives need to close to make room for the banks that will be run like the successful main street small banks. It is totally ridiculous that with interest rates as low as 0, banks cannot run profits. The only reason I see is that the operating costs are far greater than the profits and the banks lending practices are questionable. The new administration has to show courage and stop bailing out the losers and say let the chips fall where they may and let the fiscally responsible deficit reduction and spending cuts begin. If such bold steps had been taken at the beginning, the stock markets would have not gone down another 20% since the inauguration. There would have been confidence that the administration will get its own house in order before lending and bail out other institutions.

Shelby voices the opinion of most Americans. Good for him.

The unions are the problem in what we are facing right now. Rather than make concessions that would keep the automakers viable, they are fighting for their own self interests. Who well will those interests be supported if the companies are no longer in business and ALL those jobs are gone?
Yes, the auto industry has it’s share of the blame, poor management oversight, poor planning for a changing world and economy…. unwilling to adapt. However, if you have a shrinking sales issue and your competition is making better vehicles, at lower cost, then the Unions need to help an automaker remain competitive… the unions have fought harder for increasing their personal fortunes than looking at the big picture… you both reaped what you are now sowing.
I think that GM and Chrysler needs to fail, my tax dollars should not go to bail out a business that neither has foresight to plan for the future or an employee base (both sides) not willing to concede pay and benefits to help. I took a 20% pay cut in my job to -keep- it, why can’t you?

OK..So let us not close them..yeahh and put more money to “save” them..yeahh and then at the end they go bankrupt and we loose everything yeahh..good thinking dems. These banks can re invent themselfs like any other business they can merge and create a new one. Stop the bail out now !!!

Shelby voices the opinion of most Americans. Good for him.
Posted by: nick
Keep telling yourself that. The “Tea Party” began two years ago. Republicans are being removed as fast as the election process will allow.

ohh and I forgot that Barney Fife ( ako The Sheriff Biden ) is also overall in charge of the stimulus package. Way to go dems. That sucker cannot even remember the website for the stimulus package…Heeee haaaaa !!! way to go Hussein Obama !! Change I can believe on. LMAO

funny , didn’t we have touble with some savings and loan banks some time ago, oops i can’t talk about that.

Amazing how many people think having the government throw money at banks, businesses, the auto industry, etc., will solve all of our problems. Are you serious? You’ve just watch your government put is into almost another TRILLION dollars in debt, literally over night, to try to pull this off. Don’t be fooled – you or your kids will have to live with this mess for years to come. And don’t think for a minute that republicans have all the answers either – they’re the ones that lets the Iraq quagmire go on and on. We have been brainwashed to not let anyone with common sense and a working brain into government – and the worst is yet to come.

We can not let them fail right now but we CAN break them up.
There are a relatively small number of people that got us into this financial mess. They are all either in or associated with the big banking. In the words of Simon Johnson: “Any bank that is too big to fail is too big to exist
I like that. Break them up!!

Not again Shelby…
He keeps harping the same one for long time. I don’t think this is helpful to US economy.
Also, isn’t he a US senator? or foreign country’s senator such as South Korea (Hyundai)or Germany(BMW)?
Can he say the same thing if he were Michigan senator?

Lets bail out companies that have lousy managers and make bad business decisions, let’s tax the rich who make the jobs, lets give no incentive to small business to create more jobs….and we can’t figure out why the economy keeps dropping. I guy who has no experience in running a place or a business gets elected during a bad recession? Who are the morons who voted for this guy?

Does anybody else see how the republicans create self-fulfilling prophecies? First, the try to scare everybody with the nationalization rumor, then this idiot says they should fail. Oh yeah, I forgot. ‘Fail’ is the new republican theme.

Anyone else notice that the health of banks has been getting alot more scrutiny this week? That another bank failed yesterday in Georgia? I just pulled 75% of our savings out of our bank and put it in our safe…I’m not waiting for my bank to fail and have to wait 20 years to get my $$ from the FDIC. Washington has no clue how to fix this but I can tell you that taxing “The rich” aint the way to do it…never has been. If you total up all the money that Obama wants to spend, you have to lower that $250K down to $75K…report THAT Georgie boy!

When an individual with a loan at Bank-X is unsable to pay for whatever reason; perhaps she lost her job or became disabled, whatever the reason, the bank becomes a bully oftentimes not even discussing anything or any kind of terms with the person. That leaves them one recourse and the Fed. Gov’t made that harder to do a couple years ago – bankruptsy. Now that the shoe is on the other foot in that it’s the BANK that is in trouble they want to whine and complain and make everyone understand them and listen to them and help them.
It’s not fair. The bank and all its loans with it should drown. Declare a Jubilee year. Everyone, every company is POW magically debt free! All debts public and private are whiped out. Clean slate, start over. You now own your house, your business, your car. That will kick start it all over again at SANE rates. No more will a house that only has $50,000 materials and labor in it sell for $250,000 and be considered an “investment” it’s time for it to be considered a HOME instead! Dismantle all the damn gov’t agencies, why does a state have to have a freaking “Department of Ageing” (DOA)? Get rid of it! Permits and codes and licenses just to sell an apple pie or extra carrots from your garden – get rid of it! We’ve got so dam many regulations that you can’t even choose to try to just live off the fat of the land anymore due to taxes or licenses!

I think it is now clear that Senator Shelby, very similar to an ignorant child, should be ignored on any economic issue of importance.
If you want to see the stock market drop by 50% overnight, take Shelby’s advice. If you want to see interbank lending rates hit the stratosphere, take Shelby’s advice. If you think accessing credit is bad now, wait and see what happens happens if you followed this nonsense into the abyss.
It’s silly people like Shelby who think they know things, when they really don’t know anything, that drive me crazy. Nihilism is not sound policy! He doesn’t even seem to remember that Ford didn’t take any government money!

Accounts are insured up to 100K……businesses that don’t succeed should be allowed to fail. Likewise, new, better structured companies will fill the gap. That’s why the auto bailout is so ridiculous. Dumb agreements that the companies can’t afford were entered into…..they shouldn’t be subsidized for their bad decisions. Another auto maker will come in and capitalize on the demand for American autos, and they will learn from the mistakes of the “Big 3″.
They’re called cycles for a reason……..business cycle, economic cycle, etc….it’s not always up, up and up.

Instead of targeting Workers wages and Benefits, why aren’t Senator Shelby and the Republicans demanding that Chrysler, General Motors and Ford move the dozens of plants that they have built in Mexico, Brazil, Argentina, Canada, and other third world countries – Stealing American Jobs – back to the US?
Instead of bashing workers, Why aren’t you, Senator Shelby, and your Republican Cronies demanding that Chrysler, General Motors, Ford, Toyota, Honda, BMW et al, stop buying foriegn parts from China, India, etc… and purchace them from Companies in the US?
Probably the reason is that you Republicans paved the way for the loss of American jobs, with deregulation, and unfair trade agreements, since the 1970′s, giving our manufacturing base away to the third world.
Countries where they can’t even afford to buy the product, thus lining the pockets of their greedy, wealthy supporters.
MIDDLE CLASS JOBS AND WAGES LOSS – THE REAL CAUSE OF THE RECESION
The US must GROW it’s manufacturing base, now is the time to demand more jobs for American middle class workers, instead of less pay, no benefits.
More jobs will get us out of the death spiral, less pay and benefits dig us deeper. Obama seems to understand that.
That $500+ billion trade deficeit a year, EVERY YEAR, would be a GREAT STIMULUS! Wouldn’t cost the tax payer anything. COMMON SENSE! Don’t believe the idiots that got us into this problem – they have been proven wrong!
If those defaulting mortgagees would have had increased income and jobs during the Bush administration, we would have a lot less defaults, and perhaps the economy wouldn’t be in this mess.
The Unions are the only force that have driven wages upward, ande called out the Republicans on their ridiculous platforms of deregulation and free trade.
Shelby is clueless. Not only that – he is the ranking member on the banking comittee, the committee that let this whole banking crisis drop on us. NO WONDER HE WANTS TO SHIFT THE BLAME TO UNIONS.
No wonder, that instead of working to get better wages and benifits for workers, including those in his state, he wants to take the meager pension and health care plans away from retired unionized workers that have paid for them.
They understand who caused this mess, so are the “enemy”!
I will gaurantee, Senator Shelby has a better Pension plan, benefits, and insurance, but he thinks that he deserves it with his stallar performance.
The problem that GM and all the other car companies in the world are facing. are directly related to the U.S. economy collapse – not from workers.
Toyota and Honda BOTH have asked the JAPANESE government for economic aid for THEIR U.S. PLANTS – Their workers pay must be too high also, according to you Senator Shelby? The workers in those plants must also be the problem?
None of the blame is your responsibility right?
No it has to be those “evil” unions that only objective is to better the pay, working conditions, benfits, and education of their members.
That certainly is bad – for you Senator Shelby – because their is a group of Americans that understand just what you, have done, and continue to try to do to this country.
Sooner or later your constituency will understand that you are not just blaming the “Unions”, which in all reality are just middle class working people, that just try to get their piece of the pie, before GREEDY CEOS, OR LEGISLATORS take it away from them – which happens all too often, and YOU Senator Shelby are trying to make happen again!
Let’s dump your pension and insurance Senator Shelby, you are one of the main authors of this depression, and are so stupid you are trying to make it worse, for partisan politics!
HOW DO THESE IDIOTS GET INTO OFFICE?
They have been setting up this perfect storm for 30+ years, now they are blaming Obama for the Depression, and that he hasn’t fixed it in 2 months – sickening!

DTG: It doesn’t fit their argument that Toyota and Honda are getting unspecified bailouts (but at least billions) from the Japanese government, so they ignore it.

Elle: What you are saying has been occurring for the past year. The problem is trying to figure out which banks exactly are “good” at this point. And even the “good” ones like Bank of America start to sour when they take on some of the “bad” ones because the depth of bad assets is difficult to determine as of yet. And you don’t want to kill of the good banks by making them dine too heavily on the bad ones.

Unfortunately, our wonderful regulators let companies like Citibank and GM get too big to fail. Shame on them! I am a firm capitalist, but I believe in a very strong enforcement and regulatory arm of capitalism that should have the ability to enforce laws on these corporations without politicial or corporate influence. Our current regulatory system is pathetic. Our inspectors general, and SEC merely count the bodies after a disaster occurs rather then catch it before it happens. I think its best for Citibank and GM to file Chapter 11 because they are too massive at this point. If Citibank goes under, alot of very pissed off Arab princes will want blood. The UAW is a members only fantasy club at this point, Chapter 11 will wake them up to reality.

We need to keep throwing tax dollars down these black holes. It is good for the economy and we won’t have to worry aboput where it comes from. Obama and his economic team are RIGHT! We can continue to shovel, er, I mean dump (as in dump truck) money to this cause or that cause and it will be good for all of us. Shelby should be quiet and let Obama and his experts ship (as in boat loads) of our tax dollars into these
lost causes. Since most of obama and his croneys seem to forget to pay taxes
they don’t seem to give a crap! Why should we???

Elle: Because the banks were also the investors in these schemes. Basically they built up these so-called “assets” so that they could borrow more and more and are now very overleveraged.

How about we bury the Republicans?

Dan in SC said, “Look at the stock market! Look at the unemployment rates!!!! TARP DID NOT WORK!”
Oh YE of little faith. How is it that you make this proclamation after only 5 weeks of having Obama in office? The country gave George Bush an 8 year opportunity. He squandered it. We should at least afford Barack Obama 1/2 that time to turn things around. I personally think the stock market is primed for a rally between now and October. Give it some time and let the cures make their way through the system.

1percenter, my point was, it appears that bailing out these institutions had the same effect as just letting them fail. The big difference is, we don’t waste billions of tax payer money when we just let them fail. Besides, I know plenty of small banks that have been allowed to fail. Why do these giant banks get special treatment? I would argue that in the long run, it would be better for the consumer to let the big banks fail and allow the smaller banks to compete.
Letting Lehman Brothers go down appears to have spooked the other lending institutions and caused some short term pain in the economy. I understand people’s desire to take some kind of action when such a crisis occurs, but we tried using tax payer money to bail them out and it did not work. Why do we continue to try the same ideas and expect a different result? There’s a word for that.

What is funny is that I don’t have to read this article to know what it is talking about!
Senator Richard Shelby wants to shut down Citigroup, gee I wonder why…. could it be because Citigroup known back in 1998 as Citibank, was the leading bank for deregulation (yes folks it happen back in 1998) something called the Glass Steagall act of 1933 was repealed back in 1998,
Might I remind people that the Republicans were in the majority in 1998 and are the ones who did this, and what they did was put the patients in charge of the asylum, or more poignantly put the “Prisoners in Charge of the Prison”!
Check this link out it is called the 12 Steps to a meltdown!
http://www.commondreams.org/view/2009/03/07-3
And if this link doesn’t catch your fancy just look it up, there are a lot of articles on it!
Mind you I am no Obama supporter, however this wasn’t Obama’s fault! The Republicans and their idea of a free market, free enterprise, cause this meltdown. To trust people, especially CEO’s Bankers, Wallstreet and the like, well I guess the Republicans don’t really care for the people like they say they do! Because if they did, this would not have happen!
All this did was screw the American people; and the republicans right now don’t care!

“The Republicans and their idea of a free market, free enterprise, cause this meltdown. To trust people, especially CEO’s Bankers, Wallstreet and the like, well I guess the Republicans don’t really care for the people like they say they do!”
—————
Wow, this is a really twisted and bizarre way of thinking! But I suppose its the typical kind of angry speech we should expect from a lib.
I cannot really speak for Republicans, but as a conservative I can certainly say that a FREE market and FREE enterprise is infinitely more preferable to government oppression.
Here’s the big difference. If I don’t like the CEO or a bank or company, I am free to choose to not do business with that bank or company. However, I have no such choice when it comes to the federal government. And guess what, the government has WAY more power over you life than some CEO on Wall Street. There’s only one federal government in this country and it has a monopoly on power.
Again I ask, why do you libs believe the government is the solution to all problems?

Dan: Your points are valid and in normal times I’d be at your side chiming in about letting GM or one of these banks go. I don’t think, though, that this can be done at this time. Too much calamity will happen. I’m fairly patient and not the kind of guy to constantly switch back and forth in traffic lanes.
Whether or not TARP was a good idea or not will be decided in hindsight a few years from now. For now, it’s an experiment that may or may not be folly. I was actually for letting Lehman fail and I can now see I was wrong about that one. I might be wrong again now, but I don’t think repeating the same mistake of letting these “too big to fail” institutions just go under is one I think we should make again.

1percenter fair enough, but Obama is already talking about a TARP II. How about we at least wait and see if TARP I is going to help before throwing several more billions of our dollars at the problem?

>>>But of course the wheels of this collapse were really set in motion in 2004 when the Dems absolutely REFUSED any investigation of Fannie and Freddie.<<< Dan in SC has got it exactly right. You can rail at Republicans all you want, but it was the Democrats' Community Reinvestment Act that FORCED banks to make bad loans to Democrat constituent groups that created the billions in sub-prime toxic assets. And then Freddie and Fannie bought the junk so Raines could meet his quotas and get his $90M in bonuses (BONUSES in a quasi-public institution!!). When Bush and McCain tried to reform Freddie and Fannie in 2004 to stave off this catastrophe, Barney Frank and Chris Dodd blocked those efforts – because they were both receiving CAMPAIGN CONTRIBUTIONS from Freddie and Fannie. (By the way, isn't it a built-in conflict of interest for an oversight body chairman to accept campaign contributions from an entity he oversees??) Yet no one in the press is calling for an investigation of the real culprits. No, they'd rather see the bankers in front of Barney and Chris, being lectured to by the hypocritical perpetrators of this disaster. When will the press do their job again, and report the facts, not act as cheerleaders for the Democrats and cover up for them???

Here is the article that someone referred to earlier about Obama being “tired”. I don’t know if this has been posted before but it’s an interesting read…
Obama “too tired” to give proper welcome to Gordon Brown
http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/4953523/Barack-Obama-too-tired-to-give-proper-welcome-to-Gordon-Brown.html

>>>Instead of targeting Workers wages and Benefits, why aren’t Senator Shelby and the Republicans demanding that Chrysler, General Motors and Ford move the dozens of plants that they have built in Mexico, Brazil, Argentina, Canada, and other third world countries – Stealing American Jobs – back to the US?<<< Well, that makes a lot of sense, doesn't it? Those plants were built precisely to AVOID paying the absurd wages and benefits which the UAW has extorted from the Big 3 over the past few decades. The UAW has simply priced its members right out of the market, and soon they will pay the ultimate price for overreaching – they will lose their jobs. (The union bosses will be fine, of course). The marketplace is the ultimate arbiter of what wages ought to be. If one group's wages are too high, the manufacturer will implement measures to avoid paying them, by either having certain work done overseas or in other states where wages are lower. That's part of competitive free enterprise. The days of unions effectively dictating contract terms are over. Either they renegotiate reasonable wages that are competitive, or those jobs – and the unions – are doomed. Take a pay cut or lose your job – that essentially is the choice the UAW has. And if they will not renegotiate willingly, the GM and Chrysler Chapter 11 bankruptcy trustees will void all existing labor contracts anyway.

Wall Street has not lost trillions. How about you do a little bit of resarch and learn about the housing crisis. Start by doing a google on ACORN, and start following the trail. You should come up with a few names associated with Fannie Mae and Freddie Mac, also Countrywide – quite interesting about the link between these three and certain names – and the link with ACORN is very interesting.
Make sure you check out who represented ACORN in 1995 when they first started hammering for securitizing sub prime mortgages. The lawyer’s name is Barack Obama….
Most of the mess including the tanking on Wall Street is due to ACORN and their lobbying. It is due to the passing of legislation that forced banks into loaning money to low income earners who could not afford to have a mortgage in the first place. This Bill was signed by Bill Clinton.
Then in 2005 when John McCain attempted to introduce legislation that would put the brakes on this lending activity, well we know who stopped that…. the Democrats and ACORN…..

Son of Rodin,
/—–
Either they renegotiate reasonable wages that are competitive, or those jobs – and the unions – are doomed. Take a pay cut or lose your job – that essentially is the choice the UAW has. And if they will not renegotiate willingly, the GM and Chrysler Chapter 11 bankruptcy trustees will void all existing labor contracts anyway.
—–/
So are you saying that the reason Republican Hank Paulson forced Merrill Lynch onto Bank of America was in order to make sure Thain and crew got their multi-million dollar bonuses (total dispensed in bonuses was about $4B)?

I remember how mad I was when I heard of all the CEO’s and upper management, of failed banking / financial institutions that received bonuses, even though they received some TARP money. So for all of you UAW lovers…. how do you feel when the UAW workers at GM got $2,500 bonus in October, 2008 and a 3% pay raise in December, 2008? Personnally I don’t see the difference between the CEO’s of banks getting bonuses for doing a wonderful job of running their banks into the ground and the over paid UAW worker that makes $85 an hour….

Actually, bailing the out the banks has done nothing but make tax payers poorer. It may have worked had the government loaned money to GOOD BANKS which were smaller to buy up at a discount the assets of the big bad banks that were forced into bankrupcy. Liquidity, common sense, sound banking would have been injected into the system but the politicians taking money from the bad banks would not be getting so much money. What Obama and Bush have done is criminal….and congress helped them.

Eric, there is no always……we are weakening as a nation. I blame our lack education and immigration laws.

What set America away from the rest of the world orginally was a do it yourself work ethic. Our founding puritans instilled a strong work ethic which also came with and attracted ingeniunity….but atleast the libs and christian right ruined this in our immigrants, now we bring over the most pathetic and encourage them to breed the most. Their kids, no surprise, lack a work ethic and self sufficiency personal characteristics. Those that work harder and taxed more thusly discouraging any massive improvement.

>>>First of all, our ancestors survived the Great Depression despite no Internet, no high-tech market to help them recover, no air travel, etc. If the human race can survive that, we’ll be fine in 2009.<<< Yes, we will survive; I don't think that's an issue. But there will be hardship and pain – economically, it cannot be avoided. We cannot simply spend our way out of this mess by borrowing or printing trillions. Those actions will surely set up more problems. Unfortunately, I think we are in for rough going for quite some time – and by that I mean everyone, everywhere.

We will suffer under Obama harshly.

Ironically, in the end it may be that the cheaper and faster course of action would have been to allow the banks to fail (where the “good”, strong banks would buy their assets) and for the US government to provide food and other necessities for affected Americans for however long it takes to recover from this economic disaster – just as the government does when there is a natural disaster, such as an earthquake. At least the economic system would be allowed to reset, which is what must happen.

If the market thought Obama had a solution that would actually grow the economy, they’d already be turning around. Equity prices factor in at least 5-10 years of future cash flows in every equity analysts model. The market is saying that we are more screwed 5-10 years down the road today than we were before Obama was elected.
In layman’s terms, the 5-10 year economic forecast was better on November 3rd 2008 than it is today. What has changed in that time is the policy framework the next 5-10 years will take place in.

>>>The rich and greedy will do anything to get and retain power.<<< I guess you mean Stanford, whose rich and greedy sham of an investment company has just been seized by the SEC and placed in a receivership to protect investors and creditors. By the way, Stanford was a big Democrat supporter and contributor. My guess, based on his circle of friends, is that Bernie Madolf was, too. The point is that greed transcends politics…don't be so quick to assign it to any one political party.

Some of the Dem’s are now realizing that Obama was a mistake…spend, spend, spend, tax, tax, tax = you will be in debt to the gov’t and the environmentalist that will be closing down every smoke stack industry, tax the cattle farmers because the cow pooop is hurting the environment (CO2 emissions) are just a few of OBAMA’s new taxes… JUST wait and see…bills are in the house as we speak..

Son of Rodin,
/—–
By the way, Stanford was a big Democrat supporter and contributor. My guess, based on his circle of friends, is that Bernie Madolf was, too. The point is that greed transcends politics…don’t be so quick to assign it to any one political party.
—–/
Both ponzi schemers Madoff and Stanford are republicans. I have noticed a trend for republicans to pretend that the thieves are dems, but it doesn’t work. I heard someone once or twice say that Republican appointed Chris Cox and Hank Paulson were dems, too. All lies by republicans to recruit more of the dumb.

camp50,
/—–
Personnally I don’t see the difference between the CEO’s of banks getting bonuses for doing a wonderful job of running their banks into the ground and the over paid UAW worker that makes $85 an hour….
—–/
Republican aren’t you? The banks got fat bonuses for not doing a good job. The UAW workers did their jobs for fair and decent wages. Even as a republican, surely you see the difference. You’re just Joshin us aren’t you?

>>>Both ponzi schemers Madoff and Stanford are republicans.<<< As I said, I couldn't be sure about Madoff, but suspected he would lean Democrat based on his circle of friends, which are primarily Jewish (and the Jewish community as a whole is known for largely supporting the Democrat party). But Stanford has been reported – by no less than ABC News on Charlie Gibson's evening report – as a big time Democrat. He was filmed at the Democrat convention, and having private conversations with Bill Clinton and other Democrat notables. Sorry, but you're just wrong about that one.

When a company is losing BILLIONS of dollars, NO ONE should get bonuses or pay raises….Plain and simple, but then again the typical Democrate always thinks that the UAW worker that makes $85 an hour is under paid. Heck the UAW worker actually has more benefits than gov’t employees…that is pretty sad. UAW Pres. Get-the-finger, demanded the bonuses which only cost GM around $500,000,000.00 at a time when GM reported a 40 BILLION dollar lost. GM non union workers did NOT receive a bonus…goes to show you who really cares about their jobs….I give you a hint…it’s not the UAW worker…

What are the salaries of executives at GM? What are their benefits? Do government workers get those, too? When you’re old and living on SS, will you give the new, younger work force part of your monthly pay? Ridiculous!
GM and the UAW will have to meet some where in the middle, but I wouldn’t give up nuffin until all the fat cats did, too.

>>>Well shake the hand of a democrat and that would make you one, too! Never mind. Please stay republican.<<< I guess that's supposed to mean that just because Stanford was at a Democrat convention speaking to Democrat big-wigs, that we shouldn't assume that he's a Democrat? My friend, I think he probably did more than shake Democrats' hands. I think he proably lined them with contributions, too. And it's completely fair to make this association, seeing as how Democrats and the media had a cow when it became known that Ken Lay of Enron actually knew George Bush. Remember the outcry? The guilt by association? What's sauce for goose…where's the media outcry now that scammer Stanford is known to have received VIP TREATMENT at the Democrat convention? Hmmm…all I hear are the crickets.

Amen brother – as a former Lehman MD we didn’t deserve or get help so we’re gone. That should be true for Citi, BofA, AIG, GM, etc. But we’ll never let AIG die because that’d take down Goldman – and if you look closely half of the governing decision makers lose their net worth if their beloved GS goes down.

I went to the web site and read the Soros article and looked up Clowar-Piven Wow what a bunch and the Motor vehicle voter Law that was supported by Soros and carried out by Acorn, Project Vote and Human SERVE was some plan – dead people, nonexistent people – all “dead wood” contributed to a lot of voter fraud. It seems that someone could do something about Soros and his organization but as long as OB and HC are top dogs and having studied his techniques and studies under Cloward-Piven and Alinsky there is no change in hades that the U.S. has a chance unless a miracle happens.
Listed bwloe is the Leftwing Millionaires’ club. Some fascinating and scary reading that all Americans should read. The International community know this and is waiting for us to fall just as they have.
• Anagnos, Aris
• Arafat, Yasser
• Baldwin, Alec
• Baron, Fred
• Belafonte, Harry
• Benjamin, Medea
• Bing, Stephen
• Castro, Fidel
• Cher,
• Chomsky, Noam
• Clinton, Hillary Rodham
• Clooney, George
• Couric, Katie
• Donahue, Phil
• Ehrenreich, Barbara
• Evans, Jodie
• Farrakhan, Louis
• Farrell, Mike
• Fonda, Jane
• Friedan, Betty
• Ginsburg, Ruth Bader
• Glover, Danny
• Goodman, Amy
• Gore, Al
• Hayden, Tom
• Jackson, Jesse
• Jennings, Peter
• Jong, Erica
• Kennedy, Edward (Ted)
• Kennedy, Jr., Robert F.
• Kerry, John
• Kerry, Teresa Heinz
• Kirsch, Steven
• Kirsch, Michele
• Leno, Jay
• Lewis, Peter
• MacArthur, John R.
• Maher, Bill
• Mailer, Norman
• Moore, Michael
• Moyers, Bill
• Navasky, Victor
• Obama, Barack Hussein
• Penn, Sean
• Pot, Pol
• Raitt, Bonnie
• Rather, Dan
• Redgrave, Vanessa
• Reiner, Rob
• Robbins, Tim
• Roberts, Julia
• Rockefeller, Wendy Gordon
• Sarandon, Susan
• Scheer, Robert
• Seeger, Pete
• Sheen, Martin
• Smiley, Tavis
• Sontag, Susan
• Soros, George
• Springsteen, Bruce
• Stone, Oliver
• Streisand, Barbra
• Turner, Ted

>>>Stanford was promoted by Sean Hannity.<<< So what? The Stanford Group advertised on the Fox News Channel. Apparently the demographics of Fox News viewers looked more appropriate for their goals than those of CNN. Just a business decision.

Let’s turn bad assets held by banks into good assets. With one swipe of the pen, congress/obama could offer a $15,000 tax credit to ALL home buyers (not just 1st timers and those making $75K or less) and set off a buying spree raising home values 25% in 6 months. There current incentive is a JOKE. A first time buyer making $75K can buy 1 low priced home. An investor can buy unlimited homes in all price ranges. A home has to appraise for a traditional buyer because they are getting a loan. An investor can bid up a home price regardless of appraised value.
Once home prices start rising, those who CAN pay their mortgage WILL. Because they will not want to short sale and ruin their credit if they feel the value is coming back.
On the current course, here is what we can look forward to:
1. more drops in home prices
2. more drops in home prices means more foreclosures and short sales
3. more foreclosures and short sales means more failed banks
4. more failed banks means more bailouts and less loans to business to operate.
5. Less loans to business mean more layoffs
6. More layoffs means higher unemployment.
7. More unemployment means (SEE #1)
While this is going on, Stock Market heads to zero.
Less revenue to treasury and states/counties = higher taxes
Deficit balloons, no one buys our debt which will lead to hyper inflation.

Would someone ask Shelby if he remembers what happened when Lehman went dead fish?

Socialism doesn’t work. It looks nice on paper, but it’s been tried and it’s failed miserably every time (usually accompanied by widespread death and suffering).

Never again should the US allow any institution to be portrayed as “too big to fail.” Strong anti-trust laws are the savior of capitalism, and we should use them to break up large firms. Even in a global economy, and even if other countries allow oligopolies to emerge. Smaller, more nimble firms will out-compete in the long run.
“To big to fail” really means: “To big to be allowed to continue.”
Let Citi fail, let its shareholders lose all their money, fire all the top Citi executives and board, claw-back any bonuses and compensation, sell off bad assets, and find private buyers for what remains.
The sooner we get to the bottom, the sooner we can start rebuilding.

shelby I’m sure thinks slavey is ok

FDIC will need WAY more than 500 Billion.
Citi and BofA are walking ZOMBIES!
Stop the LIES ~

Two things would make a huge and immediate impact toward stabilizing banks.
1-Suspend mark to market. FDR did it in ’38. It was brought back to banks in 2007 at the worst possible time. There are other problems but this will help keep the patient alive.
2-Reinstate the uptick rule and stop allowing naked shorts. Allowing short sellers to keep beating down sinking banks is like the old practice of bleeding patients when they were ill. In their weakened condition many died due to the blood loss.

Thank goodness for Shelby standing up for the taxpayer – and I’m saying that as a Democratic leaning voter that voted for Obama.
I don’t get the comments on here against Shelby’s idea from supposed liberals. Wake up!! He’s standing up to the banking oligarchy that Obama, as yet, is afraid to confront. He’s saying that bank debt holders need to stop crying and take a serious haircut because the taxpayers are done making them whole.
Simon Johnson, Paul Krugman, and Richard Shelby are calling for the same thing. So if you want to keep propping up the credit markets with taxpayer money, then continue with your ad hominem attacks on Sen. Shelby and others who have a lot more credentials to speak on such matters. You’re only exposing your lack of understanding.

Citi needs to broken down into smaller units and sold off. Citi was the major funding source for Ameriquest, New Century, American Home and other sub prime mortgage companies that were originating primarily fraud flipped properties bought by people in scams- meaning these were not “real” loans. The underground of fraud from LLCs and corporation brought the market down. These loans were vacant properties mostly, non-arm length fake transactions and Citi was injecting billions of these securities and NIMS in the secondary global market through CDOs. They started keeping the cash flows of these residuals on their books mounting to billions not understanding these loans will default after six months (HUD changed their flipping policies in June 2008 to stop insuring flipped properties). Banks are exempt from this policy and this is why we are in a crisis. This bank should be closed or divisions sold off. Citi cannot survive. It wasn’t the ecomony, it was fraud loans..Remember New Century, Ameriquest, American Home all closed in 11/06 to early 2007.

Ok, so what does that mean for all the people that have Mortgages with Citi??

The Fall of a Free Market Prophet
by Larry Beinhart
The most interesting, and perhaps the most important, moment in philosophy in the last decade occurred on October 28, 2008, in a hearing of the House Oversight Committee, chaired by Congressman Henry Waxman.
The statements were made by Alan Greenspan, Chairman of the Federal Reserve from 1987 to 2006.
Ah, Alan Greenspan …. The Maestro, the Wizard. Just one year ago when CNBC did a TV special about him, its title was Judging a Giant!
“By the dawn of the new millennium, it was nearly impossible to find anyone in America who wasn’t gaga over Greenspan. Democrats and Republicans, Wall Street, and Main Street, dogs and cats — all were high on the Fed chairman.”
Justin Martin, Greenspan: The Man Behind Money
Now it’s 2008. The NY Times ran a piece called “The Reckoning: Taking a Hard New Look at the Greenspan Legacy,” and Alan’s in the Bubble Hall of Shame.
Alan Greenspan was an Objectivist.
It’s hard to know if he’s still one or, if he’s not, when and why he stopped.
Even the Objectivists don’t know. Their official website says: Although he is not famous as an Objectivist (nor is it clear that he still considers himself an Objectivist), arguably the most famous person associated with Objectivism is Alan Greenspan.
What, you may ask, is an Objectivist?
An Objectivist is a follower of Ayn Rand. She was a writer. Her most famous book is a novel, Atlas Shrugged. In it, the capitalist entrepreneurs go on strike against the collectivist shlubs — government, the unions, and the working class in general — all of whom leach off of the great men, and the world collapses.
The capitalist leaders go off to the wilderness to form their own little utopia, where they build railroads that run on time and airlines that never crash, and have hot, gorgeous, young, college educated heiresses desperate to bed them. They are also very fit and hunky — the entrepreneurs, that is, — who are all male.
It’s sort of a post-Nietzsche vision of supermensches. In it the only route to virtue is “a full, pure, uncontrolled, unregulated laissez-faire capitalism — with a separation of state and economics, in the same way and for the same reasons as the separation of state and church.”
She established a group. She was the leader, was surrounded by acolytes and devotees. Alan was among them.
Objectivists like to walk around with gold jewelry, a broach or a tie pin, in the shape of a dollar sign.
Ayn Rand’s real name was Alissa Rosenbaum.
She was a Russian Jew. Suddenly, I had a whole new vision. I understood.
There’s this thing about Jews. Pardon me, as I plunge into ethnic stereotyping here. But as one, via Latvia and Belarus, I claim a certain latitude.
Even after saying that, please, if you are without a sense of humor, if you find yourself watching the Daily Show or Bill Maher, and don’t laugh, please stop now. If you are an actual anti-Semite or feel inclined to assault Christians, Muslims, Communists, nuclear physicists, or encourage others to so, please stop now, and don’t quote me. If you are under 18, that’s completely irrelevant.
Here’s the thing about Jews.
They like to think. Nudge one, and a philosopher begins to spout. They have a theory, about the world, God, food, love, human relations, politics. It’s happy, it’s sad. It is, especially, utopian. Jews always have these theories about how the world could be made perfect.
They’re good at it. They make up great theories. Partly because they’re just theories, and partly because Jews are normally the underdog, there’s almost always a humanistic heart beating beneath the ideologies they invent.
But then, from time to time, a gentile gets hold of one of those theories, and, boy oh boy, there’s trouble.
For example, you have Jesus. Nice ideas, very friendly, be good to the poor, “he who is without sin, cast the first stone,” like that.
The goys take it over, and next thing you know, you have the Spanish Inquisition.
The Arabs pick it up, turn it into Islam, and what’s the first thing they do? They make the Jews and Christians second class citizens. Which is nothing to what they do to polytheists.
Karl Marx, Fredrich Engels, they’re saying “from each according to their abilities, to each according to their needs.” Saintly sentiments. They write a couple of books, a movement starts, you turn around and you’re looking at Joseph Stalin and Mao Tse Tung and a few million peasants are uprooted and slaughtered.
Albert Einstein figures out that mass can be turn into energy. The gentiles find out, and it’s bye-bye Hiroshima, syanora Nagasaki.
So I figure she meant what she said, and she wanted to be taken seriously, and she wanted people to believe her. But in her heart of hearts, she didn’t ever really think that people would live that way. Or in her head of heads, she never understood what happens when they try in the real world.
Anyway, that’s where Alan Greenspan came from.
His mind was full of Objectivist ideas. A belief that humans were rational. That self-interest would guide unregulated capitalists to do only sane and sensible things. Not every capitalist all the time, but enough of them often enough, that a capitalist system would be inherently beneficent and operate for the good of all.
Free market capitalism — as a faith — really is an inverse of Marxism. It is a theology that believes their system will bring paradise on earth and moral perfection. When their system is in power in the real world, their true believers claim that any problem only happened because their ideology has not been applied with sufficient purity.
Alan did very well for himself. He ran a consulting company that made tons of money. He was on the board of directors for Alcoa, Capital Cities/ABC, Inc., General Foods, Inc., J.P. Morgan & Co., Inc., and more. He dated Barbara Walters.
In 1987, Ronald Reagan appointed him as Chairman of the Federal Reserve.
He stayed on through Bush I and Bill Clinton.
Then along came George W. Bush.
He was one of those gentiles. The kind who would take a Jewish idea, whether it was Christianity or free market economics, and ride its ideology as far as circumstances would allow, unaware that he’d left its humanistic heart behind.
With nobody to restrain him, Greenspan put his full faith in the markets. He kept interest rates low. Which pumped money into the credit markets. He resisted regulations. When he was warned that real estate was blowing a big, big bubble, he refused to act.
Why?
Because he believed in the inherent virtue of markets.
So there he was, being quizzed by one of the heroes of the House of Representatives, Henry Waxman.
First, Greenspan said, in a prepared statement, “Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity (myself especially) are in a state of shocked disbelief.”
Well, yes. One of the fundamentals of conservative, free market, laissez-faire, Objectivist economics is that business people will act sanely and sensibly, thereby protecting people who trust in them. That’s a theological belief. Now, watching the bubble burst, Greenspan was doing a remarkable thing, and he does deserve some credit for it. He was acknowledging reality!
Then he said, “I made a mistake in presuming they were best capable of protecting their own shareholders.” Which means they need to be regulated. By someone else. By government.
“In other words, you found that your view of the world, your ideology, was not right, it was not working,” Waxman said. Meaning this notion that individual greed would, as if “guided by an invisible hand,” lead to the greatest social good.
“Absolutely, precisely,” Greenspan replied.
The acolyte of Alissa Rosenbaum, the apostle of Adam Smith, the enabler of George W. Bush, had acknowledged that their god — the free market — had failed.

The article above proves that you don’t put bankers and investment companies in charge of the financial system without some oversight…someone to police them or something!
“Proof you do not put the Prisoners In Charge of the Prison”.
That is what Allen Greenspan and the Republican Majority did back in 1998 did.
There was a Regulation called the “Glass Steagall Act” put in place back in 1930′s after the Stock Market Crash of 1920′s Well it is not there no more because of these people…Republicans and Allen Greenspan!
LOOK IT UP!
I say let what is trying to stay a floot go. The Auto makers can always file for bankruptcy and the Investement Firm/Bank/Credit Card Co. called Citigroup…let them fall. Them and JP Morgan were the ones who lobbied hard for deregulation! Besides for the Automakers, it isn’t the first time they filed for bankruptcy, they did it back in the 80′s. Funny how it happen once before when a Republican was in office….hmmm interesting!
Oh and for those of you who want to blame the rich….it was the rich who also voted for GWB, including people of Hollywood, Boone Pickens, what is interesting about him is he voted for GWB in the last two elections!

Shelby is right and one of the smartest men in the Senate.
Shelby never questioned Obama’s birth certificate.
When asked about it, he just said he had never seen it.
How is that questioning it?
Check this site for a real eye opener.
http://www.discoverthenetworks.org/groupProfile.asp?grpid=6967

Just because you are a member of UAW doesn’t mean that unions don’t share the burden of a hurting industry. My father died a union man. However, wages are uncompetitive in the industry. Unions destroy the competitive edge. American automotive industry is paying out the highest wages globally, and producing some inferior products. Sure we all love Cadi,Corvette, Mustang, but they always seem like they can be built better. I have had 3 Cadi’s and had serious problems with them all. I drive a Benz and the quality is far superior. If the industry could spend less on medical, pensions, union dues, payroll taxes..etc, GM, Ford…could spend on better design and material. Be a competitive player in the industry. As far as banks. What regard do they have for their customers? None. They screw us with astronomic interests rates and fees. Citi got to big for it’s own good and ours. Split it up. And save the TARP and Stimulus money and send it to us small business owners on the edge or going under like myself.

Greg,
/—–
We expect that money to eventually paid back to us at some point in time. If we let Citi crash we get nothing back.
—–/
I agree. It seems that the republican mission is to make everything fail so that they can point back and say “see, I told you so”. They seem to care more about being able to say they are right than anything else in life — not a care for people. That is why they keep shorting Citi, Bank of America and anybody that the taxpayer “invested” in. There really needs to be a gag order imposed on all the right-wing lunatics that have the ultimate goal of crashing our economy.

if the derivatives were valued in the multi-trillions and are now worthless—how do you ever get back to where we were without massive worker productivity and economice activity? Maybe do all you can to encourage entrepreunrers and free-market workers and let them keep their profits instead of giving it all to Pelosi

Let the big banks go under the same as the little ones. They will continue to operate and never skip a beat. They get new management along with being broken up into a bunch of little ones – that can be regulated. As much time as we have spent trying to save them, they could already have been reorganized and operating successfully. Why keep propping up crap that needs to go away.

The current approach of bailing out failing businesses is similar to a parent repeatedly bailing out a spoiled child. Many of these companies made bad choices. The Government has given them money to bail them out, but the businesses have not changed what they are doing. They keep making the same bad choices in the same wrong business model that just failed. Is it any surprise that they keep coming back to ask for more money? The purpose of the bail outs should be to protect the American people from the damaging effects of their mistakes, not protect the bad businesses themselves.
Taking these sorts of potentially unpopular stands is what real leadership is about. Sometimes you have to make hard choices and short term sacrifices for the long term good.
http://federalistblogs.wordpress.com

As much as I like Shelby (Hey, I live in Alabama! And believe it or not, but we’re not full of completely backward dumbasses, so those talking points are moot and immature.) I don’t think he’s completely right. While I’d like to see the government stay out of intervention with CITI, AIG, etc. I don’t think it’s entirely viable, nor is it probable considering it’s the former CEOs of these companies running the show for the Federal Reserve and the Treasury.
At the same time, I don’t think George Stephanopolis is a great source of balanced news, based on the fact that he was one of B. Clinton’s campaign managers. He’s got an agenda to push, and Shelby is counter to it.

Since when is Citibank immune to the laws of bankruptcy? I’ll tell – since citibank has been entrenched in the bureacracy of politics and political favors. If the playing field were fair Citi like any other business entity would fail. Period. Go out of business. Shelby is right on and right again. He is simply exposing the Emperor. And this the Emperor has some politicians hiding under his robes.

Unions have decimated our Industrial, manufacturing and Education sectors. We need to start busting these unions and if that means boycotting American car companies until the go bankrupt then thats the approach needed. That idiot in the white house wants to force labor contracts on every American company.

By all means, let them fail. What do you have then? The bad guys at the tops still get away with their billions but everyone else loses thir jobs. That’s hundreds of thousands of people unemployed and with no prospects. That’s a nice hit to the economy! Republicans who come up with irresponsible ideas like this should be fired by their constituents.

It is worth repeating that letting Lehman fail triggered a huge mess that we’re still paying for now. What Shelby said has been tried and FAILED!
And to quote him, “We bury the small banks; we’ve got to bury some big ones and send a strong message to the market. And I believe that people will start investing [again] in banks.”
Umm – no – that’s not how it works or worked! When you let these ‘too big to fail’ banks go under it causes a panic and every bank suffers because who wants to invest in a bank when it’s unclear they’ll make it? Worse, it triggers folks to start shorting those bank stocks betting they’ll fail.
Again, I don’t care if you believe me, but we’ve already walked down this path. Either Shelby has dementia, is an incompetent blowhard, or both.

Citi and GM should be shut immeiately. Failure and graft should not be rewarded, and if companies can be allowed to survive because they “are too big”, then change the laws to keep any company from being so entwined.
Throw out the unions, especially the government unions. No one should have a job guarantee.
Unions are the terrorists of the economy, the same as the taliban.

Citi is going to fail without costly and prolonged governmental subsidies. Bankrupcy is not as catastrophic as dumping billions of dollars down this bottomless hole.
Say I used to make (earn) $50k each year, but due to my mismanagement I owe 10x that, which I want to borrow from the gov’t. The gov’t charges me 5% interest and now I owe an extra $25k a year. This year, lets say I make $0. Now, how many people think the gov’t should give me $500k in bailout money?
C needs to be broken up into its viable components and sold to businesses competent enough to run them.

Citi has been corrupt for ten years. They would send me three or four offers for one of their credit cards a week for a long time. I’d remove my name and other identifying marks, package up all the crapola they sent me, put it in the postage-paid envelope, and mail it back to them each time. When Citi took on the gay agenda and trashed the Boy Scouts of America, I predicted they would eventually flush themselves down the toilet. Bingo!

The US auto industry has been killed by the Unions. They can not remain in business unless they can get rid of the UAW.
Don Buchanan

This “nationalize” vs. “let them fail” is a false apposition – some of the dumbest use of the language I have witnessed in 50 years of reading about finance and the economy.
In the US we do not nationalize, we do not let fail banks which are no longer capable of protecting the assets their customers have entrusted to them.
We have a procedure for dealing with banks which are in trouble. We use that procedure regularily and successfully. In the case of these banks, because of their size, it is feared that the procedure would not work. That fear is unfounded, though the procedure might require special management attention.
The reason we are talking about “nationalization” is because the banks’ owners and executives want to talk about nationalization instead of the normal procedure – they believe that nationalization would require the US taxpayer to compensate them for the assets which were “nationalized.
Wrong approach. We can use the normal process of bank receivership, and the taxpayer incurs no such obligation.
Bank receivership does not involve the creation of any nationalized banking institution, so no one would be doing business with a nationalized institution.
Bank receivership does not involve “forcing” a banking institution into “bankruptcy”. Nor are the standards for “bankruptcy” which apply to non-banking institutions applicable to banks.
Banks are, by virtue of their very charters as banks, subject to being placed in receivership if their management, financial health, or other factors place them in the position that they are substantally likely to fail in their obligations as agents holding their depositaries funds.
Bank receivership is a well understood and often invoked process, and the government is very much capable of executing it in most cases. The problem here is twofold:
(1) The institutions are so large that there is a fear that the receivership processes might “outgrow” the capacities of the normal system of administration and discharge from receivership; and
(2) There is a desire on the part of these very powerful and influential banking institutions and their close friends in Washington to relieve these particular banks of responsibility for taking the losses associated with their past decisions – and in the case of receivership they would intend that the poisoned fruit of those decisions would be eaten by the taxpayer, and not counted against the obligations of the banks as they were prepared for discharge.
Neither of these impediments to receivership are imperatives – both are easily overcome by use of the correct procedures in handling the receivership.
Those procedures are described, elegantly, in a paper by Woodward and Hall in their article “The right way to create a good bank and a bad bank” at their “woodwardhall” wordpress blog. (URL moderation policy prohibits my posting the actual URL for the blog.)
The net effect of these procedures would be to separate the good bank assets from the bad bank assets, to protect the depositors, to leave the bank’s owners in full possession of both parts of the bank and with full responsibility for its liabilities, to leave responsibility for continuing operations of the bank in private and not government hands, and to avoid having the taxpayer buy into the assets or liabilities of the bank.
The paper can be read at the website referred to above – I cannot include the URL – I understand the policy of the ABC website makes that impossible.

This Donuthole guy sounds like he would be a great addition to the current administration. TARP should never have been approved!!! Let these banks fail!!! if they can’t manager their own business, how can we afford to let them manage our bank accounts, mortgages, etc. ? Taxpayers for generations will be paying for the mistakes of our illustrious leader(?) and his administration (or lack thereof).

If these companies were horses they would be taken out and shot. No more money to these failures!! No more Stimulus bills. We just need to ride this out. If anyone is thinking of having kids just remember, thanks to Obama and the Democrats they will be born already in debt. Stop the bleeding!!

The entire British press is up in arms. Many in Britain are seeing this as entirely gauche and indicative of the low esteem in which the Obama’s hold England.
Worse, no one is 100% sure that Obama was smart enough to know that DVDs made in America don’t play on European DVD players. American DVDs are created in the “Region One” format while those in Europe play in “Region Two” format. A U.S. DVD just won’t play on a machine made for the English market.
Not to be out done in tastelessness by her husband, Michelle got into the act, too. Mrs. Brown came bearing two outfits for the Obama girls from Topshop, one of Britain’s trendiest and expensive women’s wear retail outlets.
In return, Michelle apparently had a staffer run down to the White House gift shop and grab two toy Marine One helicopter models for the Brown’s boys

The best answer to the problem is… We the People take 100% tax refund from the government. If you’re unemployed, why pay your taxes? They can garnish your wages… barter and trade for stuff. Those that are employed, put down 12 dependents and get all you money back. Stop this nonsense, trade in gold and silver. Send money to the local foodbanks and charities. Trade your Dollars in for Euro’s… quit supporting the insane of America. Banks and government are poor stewards of our futures.

The nationalization allows has more world to be capitalist. Who can say today that banks are not going to begin again what tomorrow what they made yesterday?