Rescue of Banks Hints at Nationalization

[DeepModem Mom]

NYT: Rescue of Banks Hints at Nationalization
By EDMUND L. ANDREWS
Published: January 15, 2009

WASHINGTON — Last fall, as Federal Reserve and Treasury Department officials rode to the rescue of one financial institution after another, they took great pains to avoid doing anything that smacked of nationalizing banks.

They may no longer have that luxury. With two of the nation’s largest banks buckling under yet another round of huge losses, the incoming administration of Barack Obama and the Federal Reserve are suddenly dealing with banks that are “too big to fail” and yet unable to function as the sinking economy erodes their capital.

Particularly in the case of Citigroup, the losses have become so large that they make it almost mathematically impossible for the government to inject enough capital without taking a majority stake or at least squeezing out existing shareholders.

And the new ground rules laid down by Mr. Obama’s top economic advisers for the second half of the $700 billion bailout fund, as explained in a letter submitted to Congress on Thursday, call for the government to play an increasing role in the major activities of the banks, from the dividends they pay to shareholders to the amount they can pay executives.

“We are down a path that this country has not seen since Andrew Jackson shut down the Second National Bank of the United States,” said Gerard Cassidy, a banking analyst at RBC Capital Markets. “We are going to go back to a time when the government controlled the banking system.”...

http://www.nytimes.com/2009/01/16/business/16banking.html?ref=todayspaper&pagewanted=all

[.... callchet ....]

1. Sooner or later some one is going to

have to hit the alarm button. Nothing as is, is going to work, or any slight modifications to it.

[HillbillyBob]

2. Nationalize them, break them up then resell them de monopolize them

them and the oil companies, Teddy Roosevelt was correct in breaking up monopolies.

[Hawkowl]

3. Essential

It will become apparent that nationalization, breakup and resale will be the only way to restructure our economic system. The losses are simply so staggering that anything less is like pissing on a forest fire. The economy won't recover until banks start lending and are forcibly prohibited from the Ponzi type speculation that has destroyed them. Localization and regionalization of lending is the antidote for one giant world economy. The banking system should resemble the internet as in take out a few servers, hell take out half the servers and the internet still functions. Now we take out one giant bank and the whole world collapses.

The current shareholders should lose everything. Many of the current bondholders should lose most everything and certainly upper level management should lose all their accrued ill gotten gains and then go to prison.

It is going to get worse before it gets better. We have an old style 19th century Panic on our hands fueled with 21st century steroids of light speed technology and globalization.

[.... callchet ....]

4. Question of logic through a story.

My wife leased a space from a large salon. The were parking problems at the salon with other businesses there. I was in the parking lot one day and had a chance conversation with the owner of the building. He was irate and had lost his temper. He told me that he was fed up with the main business my wife leased from. He wasn't going to renew their lease. I told the other sub leasers. To this day some of them are still resentful toward me for telling them. This is in spite of the fact that I gave them advance notice they had to move.

So now we know what is going to happen with the country, only because it so obvious. And people are mad at us for telling them. What is the logic ?

[Joe the Liberal]

5. The Government SHOULD controll the banking system.....

Leaving our money in the hands of private bankers is NOT a good thing. read my sig

[bemildred]

6. It's too important to be left in private hands. nt

[Joe the Liberal]

7. Yes it is.........

and the privatization of money is an ancient scam. So long as private bankers control and issue OUR money we will ALWAYS be in debt. The government has the authority to print and issue our money without having to pay interest to bankers. Here's a few quotes from our founding fathers and other influential Americans on this issue......



"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.... The modern theory of the perpetuation of debt has drenched the earth with blood, and crushed its inhabitants under burdens ever accumulating." -Thomas Jefferson



"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance." -James Madison



"The refusal of King George III to allow the colonies to operate an honest money system, which freed the ordinary man from clutches of the money manipulators was probably the prime cause of the revolution." -Benjamin Franklin



"The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity." -Abraham Lincoln



"Issue of currency should be lodged with the government and be protected from domination by Wall Street. We are opposed to...provisions which would place our currency and credit system in private hands." - Theodore Roosevelt


On signing the 1913 Federal Reserve act Woodrow Wilson had this to say...."I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men." -Woodrow Wilson