Everybody is talking about nationalization. The latest trigger is the Citi discussions with the U.S. government to convert taxpayers’ preferred shares into common equity.
Below are a few Bloomberg video clips from just this morning where experts including Marc Faber, Peter Hahn and Bloomberg’s Tom Keene talk about nationalization. It is a very controversial issue. Hopefully, these clips will give you different viewpoints on the subject.
As to the stock prices of banks that could be nationalized (Citigroup, Bank of America, Lloyd’s and RBS), it is unclear where things are headed. But, these stocks are very volatile due to the uncertainty associated with nationalization. Marc Faber, in particular, has good comments on the outlook for shares.
I will be closing the poll below on nationalization soon and posting results in an article with my own views.
Is bank nationalization a good option?
- Definitely, some banks are effectively insolvent. (36%, 75 Votes)
- No, this is a poor choice in most cases. (27%, 57 Votes)
- 100%, some places need to nationalize the entire banking system. (24%, 50 Votes)
- Sometimes as a last resort on a case-by-case basis. (13%, 28 Votes)
Total Voters: 210
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