What is the impact of banks that own our homes, cars, and credit becoming "nationalized"?

[RiverStone]

Rumor has it that within 60 days, both CitiBank and Bank of America may become the latest to get nationalized. Bailed out Bank of America owns my home (formally yukky Countrywide Mortgage).

My local bank in my little town of 3,000 says they are safe because they refused to dole out risky loans. The bank manager told me last week that everybody was mad at us in 07 for our strict lending policies, but as a result we remain standing and are in good financial health.

I'm not an economist, but for those savvy in such matters - more banks that own our homes, cars, and credit become nationalized, what will be the most obvious impact that will affect our daily lives?

[billyoc]

1. There'll be no impact at all. Forty percent of their stock will be owned by the Treasury.

That's all.

[marketcrazy1]

5. there will be no nationalization

the economic impact of a REAL nationalization would be devastating therefor it will not happen. minority ownership (40 percent) will only delay the inevitable, bankruptcy!!!!

[billyoc]

8. Devastating, eh? What's the devastating difference between public ownership

of 49% and public ownership of 51%?

[marketcrazy1]

10. owning 51 percent or even 80 percent

is not nationalization it would be a majority interest. there is a big difference.............

[ixion]

2. full-body cavity search at every branch

:+

[dmosh42]

3. I could see some great reasons for nationalization, ....

But it depends on the administration's aims. The biggest problem due to all the defaults, is the missing cash, or liquidity. That liquidity is needed for loans and re-mortgages. I would suggest the banks see a real opportunity to 'soak' the public by piling on all their usual fees, which they make up names for. By nationalization, even if only temporarily, the government can inject and process these applications for little or no fee arrangements. Since the gov't has an endless supply of cash, they won't be playing 'let's fuck the American people'.

[tanngrisnir3]

4. It's not nationalization. It's 'receivership', and there's a huge difference

The use of the term 'nationalization' is quite inaccurate: it specifically means permanent government takeover of the banks. Unless there's some new information here that I'm not aware of, that's not the case.

What is being considered and discussed is receivership, which is by definition a temporary and normal function of a capitalist economy and regulatory system.

Using "nationalization" seems rather more propagandistic to me (not that that was your intent).

[RiverStone]

9. Lots of folks are using that term and creating a stir doing it....

From 2/22/09 US News and World Report

Why Bank Nationalization Is So Scary

Scan the headlines, and you’d think it’s a no-brainer: The government takes over the most troubled banks, whips them back into shape, then returns them to the private sector in a few years. Problem solved.

Former Federal Reserve Chairman Alan Greenspan has advocated nationalizing select banks. Famed prognosticator Nouriel Roubini says it’s the only way to go, since the whole sector is effectively insolvent. Sen. Chris Dodd, chairman of the Senate Banking Committee, roiled the markets recently by saying nationalization may be necessary for awhile.

A federal takeover of Citigroup, Bank of America, and other tottering giants might end up being the only logical thing to do. But nationalizing such banks would be a desperate move, with no guarantee that it would accomplish anything the banks can’t do for themselves.



Worst of all, a dramatic federal takeover might create expectations that the government can solve a deeply vexing problem overnight – then leave the nation feeling more distressed than ever when the move fails to stem vast losses, revive the credit markets or fix the foreclosure epidemic. Here’s why nationalizing the banks would be so draconian:

link:

http://www.usnews.com/blogs/flowchart/2009/02/22/why-bank-nationalization-is-so-scary.html

I'm just trying to get a sense of what the fuck is going on, as I get lost in the economic lingo. Of course, one great thing about DU is there are so many folks capable of offering a translation. :hi:

[leftstreet]

11. It is propaganda. They want us to think they're creating Bank of Utopia

From what I can understand, this is a temporary government action. Strip out the toxic badness, then hand the banks back over to private investors.

Socialism for the rich.

[Jakes Progress]

6. It's a rigged game.

Nationalization or whatever MSM wants to call it will only happen when the uber rich figure out how to make money on it. If they don't want it to happen, it won't.

[Selatius]

7. 40% is probably enough to veto or block some of Citigroup's more egregious policies.

40% gets you a seat on the Board of Directors.

[Peace Patriot]

12. Read this amazing and important thread about B of A.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5111858

...and understand what the 'TRADE SECRET' vote counting machines have really been all about. Not just the Forever War, as I thought. But--what is much worse, as to our democracy--the Final Looting.