Post Tagged with: "nationalization"
The year in review at Credit Writedowns: Crisis Solutions
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
On releasing Citi from TARP and banking by accounting subterfuge
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
The less optimistic view of Treasury’s handling of the crisis
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
Lloyds to raise 21 billion pounds in biggest rights issue ever
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
UK: Darling confirms government to break up too big to fail banks
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
GMAC has been nationalized
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
Nationalized Citi Mexicana Redux
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
Keep your hands off Goldman’s bonuses
The title of this post is somewhat misleading – designed to be provocative to get you to read what I have to say. Indeed, I am going to defend Goldman Sach’s right to pay what it likes to its employees. But, I am also going to defend your right to be outraged and to look
Government banking Irish edition
The Irish government today announced that, if necessary, it is prepared to take majority shareholding in ailing Irish banks. However, it has ruled out full-scale nationalisation. But, what is a majority share by government except nationalisation? This is a duplicitous parsing of words that hides a more sinister interpretation of what is happening in Ireland.
Germans must get their head out of sand on banks
Germany never participated in the upswing of the housing bubble. This fact has led German politicians of all stripes to mistakenly believe their banking system was somehow immune to the problems infecting bubble markets like the US or Spain. Unfortunately, it has not worked out that way because the globalization of finance has shifted risk
The RBS and HBOS sinkholes
This comes via the Telegraph: UK Financial Investments (UKFI) said in its annual report that its loss on the two stakes – 70pc of RBS and 43pc of Lloyds Banking Group – had reached £10.9bn at the end of June. The losses, which are not yet realised, have been wracked up since Gordon Brown was
Is the new affordable FHFA loan program predatory lending?
Let’s say you’re an American named Maria living in Southern California. The year is 2006. You make $45,000 and your husband David makes another $40,000. You have two children aged six and four and your two-bedroom apartment is getting too small. So you decide to consider buying a house. Eventually, you and your husband find