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US banks have been failing at an exponential rate for the past 2 years...



By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Wed May 26th, 2010 at 03:04:15 PM EST
Do I remember correctly that there was a similar curve for a previous crisis?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Wed May 26th, 2010 at 03:06:57 PM EST
[ Parent ]
I don't know, but if the trend continues Obama will have seen "thousands" (two, to be exact) of banks put into receivership by the FDIC by the time the 2012 primary season rolls along...

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Wed May 26th, 2010 at 03:14:31 PM EST
[ Parent ]
ABC News: Obama: No 'Easy Out' for Wall Street (Feb. 10, 2009)
Well, you know, it's interesting. There are two countries who have gone through some big financial crises over the last decade or two. One was Japan, which never really acknowledged the scale and magnitude of the problems in their banking system and that resulted in what's called "The Lost Decade." They kept on trying to paper over the problems. The markets sort of stayed up because the Japanese government kept on pumping money in. But, eventually, nothing happened and they didn't see any growth whatsoever.

Sweden, on the other hand, had a problem like this. They took over the banks, nationalized them, got rid of the bad assets, resold the banks and, a couple years later, they were going again. So you'd think looking at it, Sweden looks like a good model. Here's the problem; Sweden had like five banks. [LAUGHS] We've got thousands of banks. You know, the scale of the U.S. economy and the capital markets are so vast and the problems in terms of managing and overseeing anything of that scale, I think, would -- our assessment was that it wouldn't make sense. And we also have different traditions in this country.

Obviously, Sweden has a different set of cultures in terms of how the government relates to markets and America's different. And we want to retain a strong sense of that private capital fulfilling the core -- core investment needs of this country.

So, the FDIC has taken over 200 banks, sold them to other solvent banks,recapitalised them in the process, and they are going again. Too bad that is impossible because the US has too many banks...

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Wed May 26th, 2010 at 03:07:35 PM EST
[ Parent ]
Krugman: How many banks? (4 March 2009)
But are we really thinking about thousands of banks? Here's Martin Wolf, today:
The four biggest US commercial banks - JPMorgan Chase, Citigroup, Bank of America and Wells Fargo - possess 64 per cent of the assets of US commercial banks (see chart) [chart not available online]. If creditors of these businesses cannot suffer significant losses, this is not much of a market economy.
So as far as this discussion is concerned, we've got, like, four banks. The "thousands of banks" line is just a diversion.
Not only was it a diversion, but it was wrong that "thousands of banks" couldn't be handled.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Wed May 26th, 2010 at 03:10:19 PM EST
[ Parent ]
The putz just lacks the guts! And, perhaps, the vision to see that the world would not end with the dismantling of Goldman, Morgan, Citi, BofA and Wells-Fargo.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed May 26th, 2010 at 05:51:50 PM EST
[ Parent ]
Obama is only as good as his advisors and his ideology allow him to be:
You know, the scale of the U.S. economy and the capital markets are so vast and the problems in terms of managing and overseeing anything of that scale, I think, would -- our assessment was that it wouldn't make sense. And we also have different traditions in this country.

Obviously, Sweden has a different set of cultures in terms of how the government relates to markets and America's different. And we want to retain a strong sense of that private capital fulfilling the core -- core investment needs of this country.

Whose assessment? Geithner's and Bernanke's and Summers'?

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Thu May 27th, 2010 at 04:11:33 AM EST
[ Parent ]
Persistence in a failed worldview in the face of massive, calamitous disconfirmation is Obama's failure. He could convene a round-table in the White House and invite Stiglitz, Johnson, Warren, and Hudson to meet with Geithner, Bernanke, Summers, et. al. He lacks even the courage to look at alternatives.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu May 27th, 2010 at 11:50:25 AM EST
[ Parent ]
What a spineless clown.

you are the media you consume.

by MillMan (millguy at gmail) on Wed May 26th, 2010 at 06:51:02 PM EST
[ Parent ]

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