As if the financial system isn't in enough trouble
As if the financial system isn't in enough trouble
Not going to happen, .................................at least anytime soon.
How can we not expect that to happen??? Almost all of the majors are on Federal life support now, it's only a pen-stroke away to go the whole nine yards. I've been mentioning this since last June, when Bear Stearns almost went bankrupt, but were then sold.
Since the 1990s the Fed has been looking into the Scandinavian banks form of nationalisations. They called it "contingency options".
With the stockholders of the majors all but wiped out (prices below $2/share), it's a matter of time before there will be a run on Citigroup and some of the others. The Fed will just close them up. Accounts will be doled out at $50/day, or mebbe up to $500/month.
For those that are skeptical of this happening??? I'm thinking it will. Don't know what the effect will be on our local banks, but at this time, I'd suggest you open an account in one of the Credit Union facilities. They seem to be continuing on unscathed by this dilemma. Not sure where they get there funds from, but so far in this market, they are doing business as usual it seems. I know I intend to follow my own advice.
Are you holding gold bullion?
Well, Hugo Chavez took over (nationalized) the oil companies in Venezuela and the left in this country are fawning all over him. It is a real left wing right of passage to have a picture taken with him. I expect there is quite a bit of left wing support for nationalizing industries in this nation and not just the banks!
Socialists believe in government control.
Really, we now live in a country were the producers are punished, and the non-producers, are more or less catered too. Our schools are more interested in developing a childs self-esteem than trying to teach them the bare minimum that they need to accually be producers themselves. The government considers infrastructure projects "job creation" instead of what they acually are "tax burdens",nobody has got through to them that government does not create new jobs, only the free market can do that, but alas, a large percentage of our population doesn't understand the basic priciples that have enabled our country to survive while so many others have disapeared, or fallen into such archaic turmoil they might as well have.
Not going to happen? I wouldn't bet on it,it's already started. the government wants to tell companys how much salery their ceo's can draw, what pecentage of that can be bonus' and so forth. I don't know what it will take for those out there who suffer from Obamamania to understand that the free market didn't fail,government manlipulaion of it did, had it not been for that the housing bubble would not have burst, because people wouldn't have been approved for loans they couldn't repay. Automakers wouldn't be regulated to the point that the cars they produce basically require a mortgage also.
Not going to happen? Think again, we can't get our congress to come together and make english our national language, protect our borders, or understand if we make a terrorist a little uncomfortable in order to get information that thats OK, but they can decide how to spend a trillion dollars of our money pretty dag-gone quick. If you don't start understanding the severity of the situation,then be prepared to say the pledge to the USSA.
While I may agree with some of your comments, I do not think that in the near future the government will nationalize. So far, the White House said NO,Treasury said NO,Bernanke said NO. That probably means we are heading that way. I can not believe it, well, maybe I can
Citigroup officials are in active talks with federal regulators that could result in the government owning a bigger chunk of the giant bank, a person close to the situation told DealBook.
Citigroup officials approached the regulators with a plan that would allow them to convert a substantial amount of the $45 billion of preferred shares held by the government into common stock. That would give the government a much bigger ownership stake in the company, and would likely increase its influence. Federal officials have already pressured the company to shrink itself and shake up its board.
Citigroup executives approached officials at the Federal Reserve and the Office of the Comptroller of the Currency about the plan, a person close to the situation said. No final decision has been made, and it is unclear what the government will ultimately decide. And crucial details of the plan remain unclear, including the terms of the conversion arrangement.
For Citigroup, the move would allow them to retire a portion of its existing debt, and through an accounting maneuver, immediately bolster the amount of common stock. That would appease investors and regulators, who are expected to make a bigger cushion of common stock a requirement when details of the new stress test are announced this week. But any such exchange would severely dilute existing Citigroup stockholders since it would require the bank to issue more shares.
Other big banks are considering similar actions, and a Citigroup agreement with the government could pave the way for similar arrangements. That has likely added to the mounting pressure on Citigroup and other financial stocks, which have been battered over the past two weeks amid growing investor fear of nationalization.