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Debate Over Nationalization is “Semantics”

Posted By Barry Ritholtz On February 23, 2009 @ 10:00 am In Bailouts,Credit | Comments Disabled

Nice overview from Peter Boockvar:

“The raging debate over whether to nationalize C and/or BAC is semantics at this point. With politicians in DC dictating executive pay, marketing expenses, employee trips, dividend policy, etc… with their tens of billions of pfd stock (which may now be common with an amazing sleight of hand with no new money) and the guarantee of almost a half trillion $s worth of assets, both are already wards of the state.

But, whatever step the government may or may not take, healing the banks directly is still only dealing with the symptoms and not the disease.

That disease is ‘an overleveraged consumer and falling home prices‘ — when its cured, it will heal the symptoms that is a troubled bank sector. Shifting bad assets from the banks to the govt is just a shell game as we’ll pay for it one way or another. The $64k question is what will happen to bond holders . . .


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