While it was not his intention, the reality is that Mr. Geithner is going to confirm the insolvency of the financial system. Once we face this truth, there really isn't much left to do but nationalize.Didn't really consider that Timmy's plan would be bad enough to fail to hide the fact that the financial emperors have no clothes, and the bottom line is he's doing the world a huge favor. Naturally this means it's up to Helicopter Ben to screw that plan up and go back to Good Ol' Lying.
We are not talking about the government operating the banks for the long-term. But, as was done in Scandinavia in the early 1990s, we are talking about orderly clean up, then reselling the banks to private investors.
Federal Reserve Chairman Ben Bernanke on Wednesday it was challenging for government to manage banks for a long period, appearing to argue against nationalizing troubled financial institutions.Which of course doesn't fly in the face of the trillions you've given these private banks, Ben.
"There is a problem that if you have government-run institutions you tend to loose the franchise value of counterparties and others don't want to deal with you because they don't know your future," Bernanke said in response to a question after a speech he gave at the National Press Club.
"Whatever action that needs to be taken at one point or another, there is a very strong commitment on the part of the administration to try and keep banks private or return them to private hands as quick as possible."