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Sheila Bair is a straight shooter. And as such, she laid it on the line today in her prepared remarks before Congress.  Her remarks were on the money on several counts. I will highlight just a few with commentary followed by the relevant quotes. A link to the testimony is provided at the end. Notice [...]

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This is a post which originally appeared at New Deal 2.0 by Randall Wray on why President Obama needs a new economic team, starting with Tim Geithner.
L. Randall Wray, Ph.D. is Professor of Economics at the University of Missouri-Kansas City, Research Director with the Center for Full Employment and Price Stability and Senior Research [...]

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As we head into the New Year, I am trying to look back at the last one with some semblance of a coherent interpretation of events that leads to a strategic vision of the future.  I have already touched on stimulus, kleptocracy and crony capitalism as dominant themes for the year 2009. 
These posts have [...]

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Credit Writedowns has made it clear how little will there is in Washington for substantive reform in financial services.  But, let’s be more explicit in this post about what policy makers are doing.  I will use the recent Citigroup TARP brouhaha and changes to the implementation timetable of accounting rules as the vehicle for this [...]

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In the links yesterday, I pointed to an FT article detailing the Austrian government’s nationalization of the insolvent bank Hypo Group Alpe Adria (HGAA). The financial institution, which has 40 billion Euros in assets, is the country’s sixth largest bank. But, in relative terms, this is a very large bankruptcy – using GDP at purchasing [...]

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The Obama Administration is captured. To understand why it has acted as it has, one doesn’t have to take the view that its efforts to save the banking industry were a deliberate attempt to line bankers’ pockets by transferring money from taxpayers to the banking industry. One need merely read the last post I wrote [...]

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Lloyds are looking to avoid the embrace of government by going to existing shareholders to raise capital and sidestep the draconian break-up solution foisted upon RBS by Neelie Kroes. According to Bloomberg, this is the largest rights issue ever for a British company and equates to $34 billion.
All of this must be excruciating for Lloyds [...]

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In a clear break with US economic policy, the UK government have decided that too big to fail is too big to exist. As a result, three large financial institutions now owned at least in part by government are to be dismantled. Moreover, talk of Tesco’s or Virgin getting the assets is yet another momentous [...]

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And you thought the bailouts were over and market discipline might be restored.  Not a chance – the bailouts will continue, come hell or high water. The latest demonstration of this is GMAC, where the government will now be majority owner. GMAC has officially been nationalized. Now the government is running auto financing in addition [...]

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Back in March when the US Government felt compelled to bail out out Citigroup, Tracy Alloway over at FT Alphaville noticed a curious thing – Citigroup had effectively been nationalized.
No, they were not seized by government, but Citi was controlled by government.  The Feds had 36% of shares outstanding, which in many cases is [...]