Latest news is that the US government has unveiled its intention to buy about USD250B worth of bank equity–to recapitalize their banking system. This in effect, nationalizes the US banking system, and after its absorption of Federal institutions Fannie Mae, Freddie Mac, Indymac, and recently AIG, puts the once proudly capitalistic country closer to its European counterparts: socialist.
Time notes that the US has become the United States of France:
Put it all together, and the America that emerges is a cartoonish version of the country most despised by red-meat red-state patriots: France. Only with worse food.
Admit it, mes amis, the rugged individualism and cutthroat capitalism that made America the land of unlimited opportunity has been shrink-wrapped by half a dozen short sellers in Greenwich, Conn., and FedExed to Washington, D.C., to be spoon-fed back to life by Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson. We’re now no different from any of those Western European semi-socialist welfare states that we love to deride. Italy? Sure, it’s had four governments since last Thursday, but none of them would have allowed this to go on; the Italians know how to rig an economy.
Some nitty gritty details. More from Marketwatch here:
Treasury Secretary Henry Paulson and Federal Reserve Board Chairman Ben Bernanke met with top chief executives of the largest banks and Wall Street firms Monday, and after the meeting details of the package began to leak out.The Wall Street Journal reported that in addition to Treasury taking stakes in nine top banks, the Federal Deposit Insurance Corp. will insure new senior preferred debt for three years in order to get interbank lending restarted.The Treasury plan would also raise deposit insurance for non-interest bearing accounts above $250,000.The White House said that President Bush would meet on Tuesday with members of his working group on financial markets, which includes Paulson, Bernanke and the heads of the independent regulatory agencies.The meeting would take place at 7:30 a.m. Eastern and Bush would make a statement at 8:05 a.m., the White House said.That would be followed by statements from Paulson, Bernanke and Sheila Bair, the head of the Federal Deposit Insurance Corp.
Just say NO to those who want to nationalize the banking system.
http://nomedals.blogspot.com
[...] Mr. Lewis goes on to say that tempers flared during last week’s meeting between the country’s nine largest banks and Secretary Paulson. It apparently got to the point where the former head of Goldman Sachs [...]