Obama starting to look more like Bush on banks

[LittleBlue]

There was much talk of nationalization of banks this morning (which in fact makes the most sense). Gibbs, never one to let an attempt to cast Obama as Republican light, responded to such talk with "we have an American way of doing things"- approx. quote since they cut to and away quickly.

What a clown. Obama still afraid of being cast as a liberal even as our economy is melting down. Get on board Obama, your bank plans suck.

[atreides1]

1. "we have an American way of doing things"

And it keeps changing and not always for the best.

[Raineyb]

52. "We have an American way of doing things"

is (starting to?) equal ass backwards and self defeating.

The American way of doing health care is ass backwards and self defeating and so far bailing out the banks while allowing the same crooks to continue to mismanage the banks they mismanaged in the first place.

Why the hell can't we occasionally acknowledge that perhaps other countries do things better and adapt those things to our country.

:banghead:

Damn sometimes we as a country are stupid!

Regards

[napi21]

2. I'm not so sure nationalizing is the right answer. Gibbs won't commit

to a sure answer, and he shouldn't! It's not HIS decision, and I'm quite sure that decision hasn't been made by the people responsible for making it. I sure wouldn't call that Bush light! I call it cautious at making statements that could be wrong!

[CreekDog]

3. i thought this was said over a week ago

and that the nationalization plan at that time unlike Sweden's is now in fact looking a lot like Sweden's.

and where do you come off calling Obama a clown?

[zulchzulu]

4. So how does "nationalization of banks" make the most sense?

Give me three reasons why....

[Thrill]

7. Probably

because Krugman says so. :)

[truebrit71]

8. Because they are insolvent NOW...it just hasn't been made public...

...so you either get all the bad news over in one fell swoop, or let it continue to bleed confidence from the market very single day..

[LittleBlue]

12. Because for a tiny fraction of the costs you can buy the equity

It would cost less than 100 billion to buy the largest troubled banks vs. the trillions we've wasted capitalizing zombie banks!

[zulchzulu]

14. How about some cons to nationalizing banks...

I understand the pros of nationalizing banks, but here is a list of cons and questions...

• No real customer interest needed when banks are nationalized
  
• Nationalized institutions are usually monopolies with no competition
  
• Politicians and government workers have no idea how to run a bank
  
• Nationalized institutions are not known for innovation or creative solutions... they just lumber along and operate while taking taxpayer money without much review
  
• What are the benchmarks when nationalized banks can approach semi-privatization since government-run institutions rarely give up control?
  
• Shareholders of banks get their shares dissolved when the bank is nationalized
  
• Where does nationalization of banks end? Just do BoA and Citibank?
  

[debbierlus]

36. We are ALREADY nationalizing the banks- we could have BOUGHT some of them outright

For what we have shoveled out so far...

We are funding the banks - privatizing loss - incurring public loss

And, we don't get any REAL say. We make SUGGESTIONS.

No CEOs have been fired.

They still make the decisions.

And, they get trillions of dollars of our money so we get the privillege of being able to pay them to lend to us.

[eridani]

40. Yes. It's like these fucking stupid city government subsidizing stadiums

--when they could buy the whole team for less. If it were allowed, that is.

[earth mom]

49. You nailed it. Nice racket they've got going isn't it?

:grr:

[Red Knight]

50. Give me one reason why we should continue

giving money to the assholes who caused the mess, won't lend anyway, and are more concerned with bonuses than saving the country?

Seriously, why?

[Thrill]

5. Fear of nationalization is what has had the markets tanked the last two days

[CreekDog]

17. it's not nationalization that tanked bank values but realization that they have no value left

that they are insolvent.

you are acting like a bandage caused your wound.

[debbierlus]

37. Because the shareholders & banks don't want to take the hit -

They want someone else to feel the pain.

So much for capitalism - doesn't that mean incurring the LOSSES as well as the profit?

Apparently not.

[crimsonblue]

6. Do you expect Obama to have a solution to a difficult problem overnight?

That is simply irrational. Obama isn't superman, nor is he one to rush a decision. There are a lot of interests and policies that have to sorted out, and Obama is working with his team to craft the best policy for all involved. Also, if BoA or Citi fails, then they will be automatically nationalized via the FDIC.

[grantcart]

9. Your the clown - Greenspan and Graham are begging for nationalization of banks and

you think it makes the "most sense".


Nationalization of banks wipes out shareholder equity but so does an FDIC takeover.


Nationalization of banks also means that the taxpayer would make the US taxpayer resonsible for all of the assets and liabilities of the bank, including all of the bonds that the banks have issued.


That would mean a transfer of hundreds of billions of dollars from the taxpayer to the super rich.


Yeah fuck that is a brilliant idea.


FDIC takeover of banks would allow the government to take the assets and leave the bond holders behind. They can then take the toxic assets off put that into a national 'toxic asset bank' and restructure the bank and sell it at a profit using the money for more bank purchases.


When Lindsay Graham and Greenspan back a plan its not 'liberal' - get a clue clown.

[LittleBlue]

13. Sweden did it! You have no clue what you're talking about!

They are coming around to the same realization that every other sane person is. Nationalization is a liberal policy, you tool.

Nationalization would prevent the trigger of the $50+ trillion default swaps and the failure of mortgage-backed securities. It would cost less than 100 billion!

You need to read up on this stuff! It is not a payoff to the super rich; every super rich is opposed to this because it wipes out their equity. The biggest losers would be the preferred shareholders- ie super rich and insurance companies! You've revealed your lack of knowledge on this issue with that statement.

[grantcart]

28. Sweeden's banks were already well regulated and they didn't 'nationalized the banks'

I spent a lot of time in Sweden and simply saying "Sweden did it" is not a policy. Sweden went in and temporarily nationalized the banks, restored them to health and then sold them. But Sweedish banks didn't have the capacity to write bonds that the government would then have to back.

When the FDIC took over Washington Mutual, they wiped out shareholder equity, cherry picked the assets and sold those to another working bank, exactly the same thing that Sweden did when they 'nationalized the banks'.


You have a slogan but no working knowledge of what the hell your talking about and are on the same side as Senator Lindsay Graham.

http://www.huffingtonpost.com/2009/02/15/graham-nationalizing-bank_n_167048.html

None of these guys are actually talking about Nationalizing Banks its a ruse for let the federal government buy the banks (screw the shareholders) and save the assets of the banks (including the hundreds of billions of bank issued bonds) and then sell the banks.

[LittleBlue]

29. The Swedish model of nationalization and then reselling

is a very valid opinion. You have a quote from Lindsay Graham claiming he "wouldn't take it off the table", and with that evidence you are against the idea of nationalization. That is not only incredibly shallow and intellectually bankrupt, it shows a lack of understanding of this crisis on your part.

By nationalizing and then selling back, the taxpayer would actually have a chance not to lose trillions in funding zombie banks which are not viable even with those trillions. You fall back on non-committal comment by Lindsay Graham to disparage a once-proven model to deal with banking crises.

"But Sweedish banks didn't have the capacity to write bonds that the government would then have to back."

Your above comment isn't even relevant. What the hell does it even mean? How is this a rebuttal of the Swedish nationalization model? Is your residence in Sweden supposed to substitute for actual knowledge of banking?

[biopowertoday]

48. Its still a good model and tempory and those banks with lots of toxic

assets. It should be on the table and not dismissed lightly.

[girl gone mad]

41. FDIC takeovers are a form of nationalization.

What else do you think they are?

Nationalization doesn't necessarily mean the government will be running the banks for any amount of time. It will serve to allow virtual bankruptcy without all of the counterparty risk and chaos that actual bankruptcy would cause. Shareholders will be wiped out, bondholders may or may not get a share of good assets. The toxic CDOs and CLOs can be voided.

We have no real alternative at this point. Allowing our two largest banks to fail is simply not reasonable, under any circumstance. Buying up the toxic assets in a "bad bank" scenario creates too much taxpayer risk (and systemic risk, in point of fact). Going the Japanese route with zombie banks would be pure foolishness considering the size of the mess and the state of the global economy.

Every time this subject comes up, I'm reminded of that famous Churchill quote (paraphrasing): Americans always do the right thing, after exhausting every other possible option.

[Political Heretic]

44. Exactly, thank you so much for making this point. FDIC takeover is nationalization

..a form of it.

[Imperialism Inc.]

51. Can you provide a link or some documentation that we would assume

the liabilities of nationalized banks. I think you have understood what that word means in this case.

[kestrel91316]

10. Welcome to DU. Enjoy your stay.

[DevonRex]

21. Like a digital rectal exam.

[Runcible Spoon]

38. The poster has been hereover a year

Derf.
:eyes:

[Turbineguy]

11. I think Obama's view is sound.

It gives the banks a chance to clean up their act while at the same time warning them.

A seachange in finance has taken place. It's normal for people to do anything they can to avoid change. It's why companies go under even while they know what is causing it.

To simply take over the banks takes those who caused this off the hook. Taking over the banks is the easy way out. Even at this point.

I think somewhere in this mess are bankers who know what needs to be done and are willing to do it. Their path is blocked by the deadwood above them.

Being able to put on your resume that you fixed this mess (or even helped fix it) is worth a lot more than a bonus right now.

[oviedodem]

15. The question you really need to ask is: Why the hesitation to Nationlize?? Answer:

The REPBULICANS

Who have made socialism such a bad bad evil word.

[jenmito]

16. Obama's a "clown"? Maybe the DU is the wrong place for you.

:eyes:

[Name removed]

25. Deleted sub-thread

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[firedupdem]

18. FAIL! n/t

[Name removed]

19. Deleted message

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[Name removed]

26. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[WI_DEM]

20. FDR didn't nationalize the banks, does he look like Bush, too?

[DevonRex]

22. And was he a clown?

[LittleBlue]

27. Empty rhetoric. FDR took the steps necessary to correct the crisis.

Obama is not taking the obvious step to protect wealthy investors.

[Phx_Dem]

23. I guess that's why he has a 67% approval on his handling of the economy.

[ClarkUSA]

24. Only a clown would take Republicans' advice on the economy. President Obama is no fool.

[yourguide]

30. Here's an idea. Let the banks fail, then nationalize them.

It's pretty simple.

[LittleBlue]

31. They've already failed. If not for trillions in public loans,

they'd be long gone. :D

[yourguide]

33. They want the other half of tarp dont they?

Let them fail then nationalize them. Very simple.

The fittest will survive.

[girl gone mad]

42. oh geez.

[DemocratSinceBirth]

32. Since When Is Nationalization Of Anything A Liberal Idea?

~

[dcindian]

34. He has to be there is nothing behind the banks.

Nothing. The worlds economy is a paper kitty and the governments are nervous and rightfully so.

[Numba6]

35. I guess there's no arguing w/ someone who thinks Obama is the same as Bush eod

end of dialogue

[anonymous171]

39. Nationalization only makes sense if it is done correctly.

If it is implemented incorrectly, it will become just another corporate welfare program.

[Political Heretic]

43. Gibbs full quote is even more pathetic. (LINK)

http://finance.yahoo.com/news/Obama-tries-to-halt-talk-of-apf-14427645.html

[spanone]

45. so wrong

[marshall]

46. Some of Obama's ideas are naturally going to overlap with Bush's

Obama shouldn't be restricted to only doing things the exact opposite of the way Bush did things. He's running the same country, dealing with the same system of government, it's only natural that some of the approaches are going to be similar.

[tammywammy]

47. shush you and your damn facts

:)

[Patchuli]

53. My President is not a "clown"

and I would like to see how you'd handle this massive disaster better.

[Runcible Spoon]

54. This line of reasoning is troubling.

One does not have to come up with an in-depth plan to save the economy just to have an opinion, even a very astute and educated opinion. Often enough, people DO have their own suggestions for change, but this kind of throw-away remark just lowers the discourse and is an attempt to discredit critique.

I don't like, say, the movie Jurassic Park. Do I need to rewrite the script, recast, reshoot, re edit, etc. and come up with a better version of the movie just to have a valid opinion of why I don't like it? Why is politics any different? I don't recall anything in the Constitution about "citizens must necessarily come up with valid solutions if they are to critique their political representation". Bullshit. We elected them to represent US. That is THEIR JOB, to research, craft and push policy for their constituents. It is NOT the job of the voters to do this for them but it IS our responsibility to make sure our interests are being addressed. And one way of making sure that occurs is by critiquing and providing constant feedback, even civil unrest if necessary.

[Dreamer Tatum]

55. Some people have a good opinion for stupid reasons

...and it's usually not worth the effort to discuss anything with them.

[Dreamer Tatum]

56. Here is a dispassionate argument in favor of nationalization

If the bad assets of the banks were marked to market, they would swamp the equity immediately. In short, Citi
and BofA are insolvent. The alternatives are to keep pumping money into them under the status quo, and expect them
to make good decisions that restore solvency. That might require the same sort of financial instruments that caused
the problem in the first place. Even so, they are not likely to lend the volume of money that the country needs.


The alternative is to sweep in and take over, flushing out the management for new leaders. Believe me, there are other
people who can run a bank.

The shareholders lose utterly under nationalization, but they're fooling themselves under the status quo. The banks
require public funds to exist, and the shareholders only thread right now is the fact that the govt hasn't declared the
banks insolvent.

I am usually not a fan of nationalization, but pardon my French: fuck the shareholders. If the only glimmer of hope they
have is that they government will continue to subsidize the banks, then they are by definition the only people who
can benefit from bank recovery.

I think it's time to take the medicine.