On Fri, 8 May 2009 15:33:52 -0700, "John R. Carroll"
wrote:
snip
Do you have confidence in this economy?

No, and I won't until I see Congress step up and put a company like GM, or
really GM for starters, down like a dog.
There isn't a single reason America ought to go on the hook to create jobs
in China, Mexico or anywhere else, not in the numbers GM's latest
restructuring plan indicates. That plan says only one thing to me. GM just
doesn't get it and that means they are too stupid to survive.
Then it will be time to release the productive capital of the 19 banks just
stress tested back to the market. We have a mechanism to do this. Congress,
the Obama administration and the American public need to just suck it up,
quit crying like a bunch of Nancy boys and get the hell on with it.

I'd start with a non-bank, AIG. Have Congress pass the necessary
legistlation poste haste, authorize the money with new legistlation and then
just BK the thing the way we sieze a bank.
American's are not the ones that need a confidence transplant, it's the
banking and financial services giants.. The confidence that Citi needs to
have is that when they mess up big, the American taxpayer is going to come
in, sieze and sell their ****, kill the men, rape the women and then burn
what's left to the ground without batting an eye. Were these 19 banks to
believe that this might be their fate, they would probably alter their
conduct in the direction of prudent behavior. The banking business might go
back to being as completely dull as it was in the 40's and 50's. That would
be entirely appropriate and, to borrow a phrase from Mike Milken, I'd be
highly confident.


JC
=====
This just posted on CNBC. My only comment is "what took so
long," but then again it is hard to believe things got so bad so
quick, with everyone assuring everyone else that things were just
fine.

This "sudden unexpected failure" took at least 30 years to
create, and wipes out a generation's [or more] financial/economic
gains and savings.
-----
Big US Banks May Be Headed For Extinction—And Soon
By: Albert Bozzo, Senior Features Editor | 08 May 2009 | 02:30 PM
ET

In the world of banking, too-big-to-fail may be in the process of
morphing into too-big-to-exist.

After hundreds of billions in federal aid and even more in lost
investment capital, both the government and investors may be
ready for a big sea change.

The only question, for some, is how quickly it will happen.

“In the next few months, we'll see the tacitly nationalized
banks—Bank of America, Citigroup —sold off rapidly into pieces,
turned into much smaller banks,” Sanders Morris Harris Group
Chairman George Ball predicted on CNBC Thursday, adding the
government wants to send a strong message, to “punish
too-big-to-fail banks that have blotted their copy and not
exonerate their management.”

“Five years from now, these banks will be broken up,” is how FBR
Capital Markets bank analyst Paul J Miller sees it.

From Washington to Wall Street to Main Street, a dramatic change
in conventional thinking appears to underway.

“Some institutions are too big to exist, because they are too
interconnected," Sen. Richard Shelby (R-Ala.) told CNBC earlier
this week. “The regulators can’t regulate them.”

That conclusion became painfully obvious in the two faces of the
financial crisis. On one side, the federal government had to
provide billions in aid —and on more than one occasion—to the
likes of to Bank of America, Citigroup,and the giant insurer AIG,
which has its own lending unit, to prop them up.

On the other side, the failure of Lehman Brothers—which might
have been averted with federal intervention—reverberated
throughout the global economy.

Months later, the Obama administration and Congress now appear
keenly focused on the dilemma and are expected to create
legislation that will empower regulators to intervene in the
affairs of big financial institutions and essentially wind down
their operations in an orderly fashion with limited collateral
damage to the economy. Such authority would also apply to
investment banks tirned bank holding companies, such as Goldman
Sachs.

“They need it and they’ll get it,” said Robert Glauber, who was a
top Treasury official during the government rescue of the savings
and loan industry two decades ago.

Regulatory reform is also likely to include new antitrust
authority to block mega-mergers creating financial firms whose
problems could adversely affect the overall system. Analysts say,
if that’s the case, the government won’t want the too-big-to-fail
companies of the past essentially hanging around.

Exactly how the government does that is unclear, but experts say
there are ways without resorting to a heavy-handed approach such
as nationalization.

snip
On one side, the federal government had to provide billions in
aid —and on more than one occasion—to the likes of to Bank of
America [BAC Loading... () ], Citigroup [C Loading...
() ] and the giant insurer AIG [AIG Loading... () ],
which has its own lending unit, to prop them up.

On the other side, the failure of Lehman Brothers—which might
have been averted with federal intervention—reverberated
throughout the global economy.

Months later, the Obama administration and Congress now appear
keenly focused on the dilemma and are expected to create
legislation that will empower regulators to intervene in the
affairs of big financial institutions and essentially wind down
their operations in an orderly fashion with limited collateral
damage to the economy. Such authority would also apply to
investment banks tirned bank holding companies, such as Goldman
Sachs [GS Loading... () ].

“They need it and they’ll get it,” said Robert Glauber, who was a
top Treasury official during the government rescue of the savings
and loan industry two decades ago.

Regulatory reform is also likely to include new antitrust
authority to block mega-mergers creating financial firms whose
problems could adversely affect the overall system. Analysts say,
if that’s the case, the government won’t want the too-big-to-fail
companies of the past essentially hanging around.

Exactly how the government does that is unclear, but experts say
there are ways without resorting to a heavy-handed approach such
as nationalization.

snip

Some analysts say recent events highlight a fundamental problem
that has been somewhat ignored for years; the financial
supermarket structure of the big institutions makes them
difficult, if not, impossible to operate with great success.

“Investors will say,That business unit hidden in there; let's
spin that off,” says Sorrentino. “Either the regulators are going
to force it or the shareholders are going force it.” {comment:
This again assumes the stockholders have some say in how the
business is run.}
---
http://www.cnbc.com/id/30624782


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).