My comment: Along 18 months, or a bit longer, we have seen how different policies and rules were useless. To inject funds into banks, to stop foreclosures, to bailout banks, to promote or let merges and acquisitions, etc. as many had predicted nothing worked to ease credit market. Actual circumstances have not improved, they have worsened. As the problem is no longer the banking system but a previous one (the economy activity) whatever we do with banks will not be a crucial change in the economy. In any case, a decission pending.
We decide to do nothing. To let trash, toxic assets, stay into the trash can and let its owners, bankers and borrowers, to deal with it. In my opinion this is the easier and cheaper way for Americans and for US economy. I bet that we have heathy banks, credit unions or other credit institutions in TX, OH, NC, VA, etc. that can be used to rise credits, starting from scratch if necesary, as soon as the real economy improves. To forget current banks and let them fall to bankrupcy or to survive by their own means. The second option is what more and more people advise. To nationalize banks. It seems the only way to force them to lend the funds that they receive from the US government. It does not mean to blame banks, in fact, banks are doing now what they should did in the past, to tighten credit conditions and terms in order to preserve their future profits. I guess that to nationalization would follow a financial policy similar to what Chinese government is doing now, to loose credit terms and conditions, to soften bank requirements (reserves, rates asset/ loans, etc.) and at the same time to fund them not to clean those banks (that would be useless), but to revive credit market with fresh loans Peace and best wishes. Xi http://www.bloomberg.com/apps/news?pid=20601087&sid=a4Tl65kFU96s&refer=home Feb. 2 (Bloomberg) -- President Barack Obama shouldn’t hesitate to nationalize the banks that need to be bailed out, Nobel Prize-winning economist Paul Krugman said. “If taxpayers are footing the bill for rescuing the banks, why shouldn’t they get ownership, at least until private buyers can be found?” Krugman wrote in a column in the New York Times published today. “But the Obama administration appears to be tying itself in knots to avoid this outcome.” His remarks echo those of Nassim Nicholas Taleb and Nouriel Roubini, who said last week that nationalizations will be necessary to bring the U.S. banking system out of insolvency. Obama will require banks to bolster lending in return for government aid, lawmaker Barney Frank said yesterday, stopping short of taking full ownership. Krugman said the U.S. government’s rescue plan appears to put banking risk with taxpayers when loans go bad while giving the rewards to executives and shareholders when things go well. He cited newspaper reports that Obama’s rescue plan will include government purchases of troubled bank assets and guarantees against losses. Treasury Secretary Timothy Geithner said on Jan. 28 that U.S. officials will “do our best” to preserve the banking system run by private shareholders. Global economic growth will come close to a halt this year as more than $2 trillion of bad assets in the U.S. help sink economies from there to the U.K. and Japan, the International Monetary Fund said last week. The world’s largest economy may shrink at a 5.5 percent annual pace this quarter after contracting at a 3.8 percent rate in the fourth quarter, according to a forecast by economists at Morgan Stanley in New York. The government’s $819 billion economic stimulus package is still “very much the right thing to do,” Krugman said. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
