Obama needs to nationalize zombie banks NOW !

[EVDebs]

Paul Farrell's marketwatch article stresses a $516 trillion derivative figure,
http://www.marketwatch.com/news/story/derivatives-new-ticking-time-bomb/story.aspx?guid={B9E54A5D-4796-4D0D-AC9E-D9124B59D436}&print=true&dist=printTop

and James Lieber's Village Voice article What Cooked The World's Economy ?
http://www.villagevoice.com/2009-01-28/news/what-cooked-the-world-s-economy/

stresses a $596 trillion figure, while Steve Pizzo's article Follow The Numbers
http://newsforreal.com/newsdesk/?p=406

stresses a $1.14 quadrillion figure for total world derivative debt.

In any event, the number CANNOT be paid off and should not be paid off. Taxpayers in the US, and worldwide, will see credit 'crowded out' by bankers rushing to the head of any bailout line.

President Obama should deal boldly and write off derivative debts NOW !

Joseph Stiglitz has written until he's blue in the face on this; Paul Krugman put out an editorial today asking why Obama is 'dithering',

The Big Dither
http://www.iht.com/articles/2009/03/06/opinion/edkrugman.php

The people know now, it's no secret any longer, the dollar amounts mentioned in the Bill Maher's film clip,
http://www.youtube.com/watch?v=PhzpBU6h5xs&eurl=http://www.facebook.com/inbox/readmessage.php?t=1106480536756&feature=player_embedded

where Erin Burnett of CNBC says 'no one knows'...well, YES they do ! And the Dept of 'How F@#Ked Are We ?' (the general public) now knows too. We demand that President Obama level with us, write off those bad toxic derivatives, and free up that capital for constructive use. Do it now !

[babylonsister]

1. One major point. I'm not giving "President" Obama points on what to do,

Have fun. But Erin Burnett? Please.

[EVDebs]

3. If you think being on the 'bailout merrygoround' is good policy you need to tell Obama to stop nt

[babylonsister]

4. I don't presume to be smart enough to tell anyone to stop. I

just hope they know what they're doing. Yes, they could be wrong.


But they could be right, too.

[EVDebs]

11. Larry Summers knew better, but sandbagged Brooksley Born

"Some of the stories go well beyond complaints about his manners. Brooksley Born, chairwoman of the Commodity Futures Trading Commission, received a call in March 1998 in her office in downtown Washington. On the other end was Deputy Treasury Secretary Summers. According to witnesses at the CFTC, Summers proceeded to dress her down, loudly and rudely. "She was ashen," recalls Born's deputy Michael Greenberger, who walked in as the call was ending. "She said, 'That was Larry Summers. He was shouting at me'." A few weeks before, Born had put out a proposal suggesting that U.S. authorities begin exploring how to regulate the vast global market in derivatives. Summers's phone call was the first sign that her humble plan had riled America's reigning economic elite."

The Reeducation of Larry Summers p.2
http://www.newsweek.com/id/185934

[TeamJordan23]

2. I agree, no bailout is going to save these banks. Temporary nationalization is the answer. nm

[EVDebs]

5. How do you pay for education, healthcare etc. and have Geithner and Summers sandbag it all ?

If these two economic idiots continue to sandbag Obama's goals in order to prop up these 'zombie banks' then Obama will be answering Rush Limbaugh's prayers because Obama's administration will have failed. I pray that Obama acts BOLDLY soon on the nationalizations. It all rides on this.

[babylonsister]

6. No one is sandbagging anything.

You're right, this bank thing is weird. But

There are a few different things going on. The Stimulus plan, the TARP 2 plan, the 'other' plan, and that healthplan thing.

Now we're fighting that addition that has 'old' pork on it that rethugs love. Dems, too, afaik.

Please clue me in on how it's being sandbagged by Geithner and Summers, because that eludes me. Thanks.

[EVDebs]

10. The Big Dither by (Nobel laureate) Paul Krugman...read it

The Big Dither
http://www.iht.com/articles/2009/03/06/opinion/edkrugman.php

""The truth is that the Bernanke-Geithner plan - the plan the administration keeps floating, in slightly different versions - isn't going to fly.

Take the plan's latest incarnation: a proposal to make low-interest loans to private investors willing to buy up troubled assets. This would certainly drive up the price of toxic waste because it would offer a heads-you-win, tails-we-lose proposition. As described, the plan would let investors profit if asset prices went up but just walk away if prices fell substantially.

But would it be enough to make the banking system healthy? No.

Think of it this way: By using taxpayer funds to subsidize the prices of toxic waste, the administration would shower benefits on everyone who made the mistake of buying the stuff.

Some of those benefits would trickle down to where they're needed, shoring up the balance sheets of key financial institutions. But most of the benefit would go to people who don't need or deserve to be rescued.

And this means that the government would have to lay out trillions of dollars to bring the financial system back to health, which would, in turn, both ensure a fierce public outcry and add to already serious concerns about the deficit. (Yes, even strong advocates of fiscal stimulus like yours truly worry about red ink.) Realistically, it's just not going to happen.

So why has this zombie idea - it keeps being killed, but it keeps coming back - taken such a powerful grip?

The answer, I fear, is that officials still aren't willing to face the facts. They don't want to face up to the dire state of major financial institutions because it's very hard to rescue an essentially insolvent bank without, at least temporarily, taking it over. And temporary nationalization is still, apparently, considered unthinkable.

But this refusal to face the facts means, in practice, an absence of action. And I share the president's fears: Inaction could result in an economy that sputters along, not for months or years, but for a decade or more.""

[islandmkl]

7. dear erin burnettt:

the mirror lies...

[PBS Poll-435]

8. No Thanks.

nt

[FrenchieCat]

9. Perhaps you should send in your resume......

or perhaps you need to sit tight for a few minutese.

That's part of the problem the media is always talking about;
those who say they will be patient, but not really.

This shit has got to stop.

We elected Barack Obama as President, not Erin Burnett!

Let somebody breathe and let them decide...
or better yet, write to Peter Orzak....
and like I said, sent him your resume.

[RememberWellstone]

12. You must be joking

So our government is expert in banking now?? Are you nuts?

[EVDebs]

13. RTC worked fine in rescue of the S&Ls

Besides Krugman and Stiglitz (Nobel laureates, shock gasp), we now have Alan Greenspan trying to save his bacon by saying bank nationalization should be done at least temporarily.

Some bank regulation, hey, it worked fine until 1999 after all, was good enough for FDR and the country, but I'm nuts like a fox.

[dkf]

14. If we nationalize Zombie Banks does that make us liable for their

Credit Default Swaps?

If so I say STAY AWAY.

YEARGH.

[ClarkUSA]

15. Um, President Obama has NO legal authority to nationalize banks now.

[EVDebs]

16. De Facto, with taxpayer bailouts worth more than the banks now

He already has 'nationalized' to a vast extent. Why not just face facts ? Just like with the S&L's a RTC could be created to 'nationalize' the banks.

[beachmom]

17. It may not be legal or possible. Only part of Citigroup is a "Bank"

and a lot of the business is foreign.