Igorsky

Nationalizing the U.S. Banking Sector: There's No Choice

I do not see why valuation of houses is a problem. Keep it simple. Use the prevailing values of houses in 1999 (one year after the repeal of the tried and true Glass-Steagal). Counties have this record... add 10% for homes built after 1999. The per square footage is available per location. The values of houses in 1999 were at sustainable levels and is even more valid in today's average income levels.

Using this valuations for bank takeovers, the homes can be sold with no risks to taxpayers. At this level of valuation, the houses will sell quickly and the prices will even go higher because of demand. The difference between 1999 and actual selling price, if positive, can be a shared benefit between the taken over bank and the taxpayers.

Competent Banking CEOs: They Do Exist

The Treasury should stop playing around trying this and that schemes and prolong the agony and head towards a long term disaster, a.k.a. Japanese economy of the last 25 years.

Instead, use the proven and successful Swedish model and do a short term nationalization of troubled banks as Roubini explained yesterday in his great article (sorry, I do not have the link) on how to solve our economic morass.

We have gone thru 1 million foreclosures so far and six million more more to go in the next 3-4 years. We need to take quick and swift measures that will quickly hurdle over all these competing interests of politicians, legislators, powerful bank lobbies, etc. and solve the problem. Sure, it will wipe out investors and shareholders but without this swift measure, in the long run, everyone loses lots more.