The credit institutions have a wealth of information about the financial system (and those mortgages). You want to at least save the institutional memory in those banks.
This can be achieved by letting them all go bankrupt and then buying up the pieces. But the government would have to have a "public holding company" or something like that to be able to own companies. This is not the case.
Except that the Dodd plan creates that authority, while keeping within the market narrative and thus being palatable.
One more point: this bailout plan has been designed for the Financials, but other corporations will want in on it. When the SEC decided to ban short selling of Financial stocks, some industrial companies successfully lobbied to be included in the short ban. Who is to say that General Motors won't ask the Treasury to buy some Shitpile™ from it? A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
I ahve the feeling that nationalization would have a slightly higher chance to succeed... but a Dood program with a robert Reich approach investment during the transition has similar or higher.
IN any case, I am not still completely sure it woudl work..
So, Is Euroep , China and Japan ready for derivative meltdown? and for a huge contraction in US demand?
These are the two questions we should be worried here. I know about Spain.. no big deal about the ocntraction demand, but given that we are in the same bubble process than the US, a credit default will eb really bad for Spain..
the US falls, Spain goes with it.. at least we make some kind of deal with the Chinese and convince them that we are in better shape than the US and can send ther saving around here :)
A pleasure I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude
