Why not nationialize Citi ?

[Nick at Noon]

I hear some people claiming that to nationalize the banks would cause damage and harm to the stockholders. That is a specious argument. The shareholders have already been harmed. All nationalization would do is put them out of their misery.

A year ago the stock of Citi (C) was about $25 a share. Yesterday it was $2.52 a share. Being left exposed to the manic whims of Wall Street is what cost the shareholders 90% of their assets.

To nationaliize them would only add another 10% to their loss. That's really not bad. And where the previous 90% loss benefited nobody but the speculators, this last 10% loss will help the country and the taxpayers.

Let's go for it !

[ThomWV]

1. I think we plan to ... later this afternoon.

WTF?

[malaise]

2. As was pointed out on Shuster's Mythbusters yesterday, nationalization

of banks has been taking place on Fridays for months. Whether it's short term or long term, the government walks in, shuts down the bank and takes it over. Then it finds other banks to buy them.

[exboyfil]

3. You are absolutely correct and we should have done it to

Citi and BoA and AIG before we sent them over $400B (probably closer to $1T). Right now the money we sent to AIG is 100 times its market capitalization, let that sink in, 100 times.

[Diclotican]

4. Nick at Noon

Nick at Noon

Many european country have going that way, when the banks them self have going haywire and almost broke.. After 1987-89 the government in Norway nationalized most large banks in Norway, and fired most of the leaders, and had to spend a lot of tax payers money to save their sorry ass because the economy more or less was in ruins after the feast in the 1980s when everyone believed the sky to be the limit - many believed that then..
But for the most part, after the economical meltdown was over, every banks was privatized over time. Off course the stockholders was loosing money.. In Norway they lost most of the value because the government just say, that a stock is 0 worth, and the banks have to Prof for them self that they are capable of surviving economic... Today we have a strong, healthy bank industry, who are regulated (more or less, but compared to 20 year ago, the banks is pretty well on their own to decide what to do) And even in the economical meltdown, who have hit Norway too, the economy is pretty strong still, and it more or less impossible to believe that our bank system Will go the same way as Iceland did.... Because our economy is strong... And for the most part, the banks in Norway tend to be safe when they lend out money.. Off course the last decade and the meltdown have hit our economy hard too. But compared to many other country, it looks like our "communist light" policy when come to economy is doing it right - one of your own claimed Norway to be Little communist light:P: Even that I had not the time to take on him about that, it is interesting that many believe that - even that 60 percent of our economy are in private hands.. The government do have a hand in large parts of our economical life, a thing that is old, not just since the War, but long before thatt..

Off course, it is Difficult to nationalize the bank system in US. But at the look at it, is is maybe the only way to save the economical sector in the US for the moment.. It is ironic when even hard liners "free marketeers" are talking about the blessing for nationalized bank systems... But I am not sure this is the right thing to do for the US then... But something have to give, and I believe US Will experience a lot more direct government control in economy the next couple of decades than before..

Diclotican

[melm00se]

5. the question is:

where will they be next year? 2 years? 5 years? 10 years?

To many, a stock purchase is a long term event with times lines out in the 5-7 year range. Nationalization takes away that time line and there are many major shareholders who are part of personal, corporate, government and union retirement and pension plans, they would take that hit and erode their retirement stability.

[mod mom]

6. Yes but we must terminate top management w/o golden parachutes (in fact, I believe

we must see if RICO is applicable for their enrichment practices)

[Nick at Noon]

8. Anybody who gets a bonus while the company is losing money ...

... should do some heavy Federal prison time. In the deepest, darkest cell at Ft. Leavenworth.

Bonuses are not suppose to be for people who ruin a company. Try to explain that to the Republicans.

[mod mom]

9. Anyone getting a bonus should have to give it back (just like when a bank makes an error,

it's not your to keep) Those dishing out the bonuses at a time of loss should do hard time-imho :hi:

[baldguy]

7. It shouldn't be nationalized - the govt should simply become the majority shareholder.