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Banks: Nationalize, Cleanse and Get It Over With

Tom,

I agree - nationalization is the simplest, most cost-effective solution. Instead of giving money to banks to waste, just take them over, fire management, cut the dividend, and wipe out the common shareholders. They may complain, but if you hold the common, that's the risk you take. I would just invalidate the toxic derivatives rather than trying to save them. It may cause pain in the short term but it will be cheaper and easier in the long run.

Unfortunately, I don't see it as being politically feasible, because as soon as you mention the "N word" you invite a whole host of rabid fools who start screeching about socialism. Nevermind the fact that the banks will eventually be privatized again after they're fixed!

Was That a Bottom? Should We Even Care?

This is how you build lasting wealth - not by day trading or getting the "hot stock tip" (and buying in at the top), but through simple, boring techniques that most people have heard of but few actually practice.

There's a reason Buffet bet big on index funds against the flashy hedge fund managers - index funds work, and they are cost effective. The number one rule of investing is to keep costs low - that will ultimately determine more over the long run than anything else.