On Mon, 23 Mar 2009, SA wrote:
> But we've *already* guaranteed all bank liabilities.
By no means. What happened at Citi was a forced debt equity swap for large holders of preferred shares. They took a huge hit. And we've given absolutely no guarantee we won't do that again. Fear over unsubordinated debt is rampant. That's why -- unlike in the Swedish case -- nobody is investing in banks or lending them money.
> I don't follow your thinking here. Is there some big point you think
> Simon Johnson, Krugman, Roubini, Stiglitz, etc., have all failed to see?
Well yes, now that you mention it -- none of them seem to see any difference between nationalizing a global investment bank and nationalizing a national commercial bank. I'd love for one of them to address it.
But that's got nothing to do with the post I made about Sweden.
Michael