On Feb 11, 2009, at 4:29 AM, Michael Pollak wrote:
>
> On Tue, 10 Feb 2009, Doug Henwood wrote:
>
>> <http://doughenwood.wordpress.com/2009/02/10/obama-to-coddle-
>> bankers/>
>> At this point, the only thing that makes any sense is to
>> nationalize the weakest banks, kick out management, wipe out the
>> shareholders, clear the decks, and start over with a tightly
>> regulated system.
>
> I have three naive questions.
>
> One, besides the pleasure (which I would feel as well as anyone)
> what exactly do
> we get of kicking out management? Wouldn't we simply have to hire
> new bankers
> who we would then have to get up to speed? Isn't it more a question
> of
> re-regulating bankers, whoever they are?
There should be consequences for failure. Future execs should know that if they fuck up bigtime, no biscuit for them.
> Secondly, if we nationalize the two weakest banks (BofA and Citi)
> right now, is there no chance that will cause a rapid meltdown in
> the worth of the banks we don't nationalize? (Thus getting
> nationalization off to a horrid-looking start?) Is this something
> we don't have to worry about?
Why would nationalizing the weak cause the meltdown of the not-so-weak?
> Thirdly, is it certain that the stress-testing that Geithner talks
> about can't be a path to nationalizing the banks that fail it in the
> near future? That this isn't an exercise in laying political
> groundwork for nationalization?
Could be. Looks to me more like they're trying to do everything but nationalize, but they may be forced into it fairluy soon.