Wednesday, October 08, 2008

U.S. May Nationalize Banks

The party of free market philosophy makes it necessary for the ultimate government intervention.
Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials.

Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks’ balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.

The Treasury plan, still preliminary, resembles one announced on Wednesday in Britain. Under that plan, the British government would offer banks like the Royal Bank of Scotland, Barclays and HSBC Holdings up to $87 billion to shore up their capital in exchange for preference shares. It also would provide a guarantee of about $430 billion to help banks refinance debt.

The American recapitalization plan, officials say, has emerged as one of the most favored new options being discussed in Washington and on Wall Street. The appeal is that it would directly address the worries that banks have about lending to one another and to other customers.
This is what eight years of pigs at the trough have broughtus. They will now use our tax dollars to buy banks so that they will finally do what they are in business to do. We are truly at a crossroads in this country and the future is not looking very good. Unless we understand exactly how this happened we are doomed to repeat it. I would like to see many of the Wall St. executives marched off to jail or sued for their large pay packages. We ar at the cusp of a major financial disaster that could have repercussions for a generation and we were brought here by greed. Lets make greed very costly to those who brought us to this point.

1 comment:

HD4LYF said...

Here's a link to the letter McCian signed. OBAMA refused to sign and blocked every effort to regulate Fanny/Freddie. This is one ossue that cannot be blamed on Bush!