kruser53

A Stress Test Shocker: BofA Needs $35 Billion

The credibility of Ken Lewis has the greatest need of capital.

Converting TARP's Preferred to Common Stock - Great Idea

Linus - - -

You wrote: "...common stock improves lending incentives for troubled but solvent banks. Preferred stock is too much like debt to encourage banks to make good loans. "

I draw your attention to "...troubled but solvent..." Aye, there's the rub. No one knows who's merely troubled and who's insolvent.

Let's Hurt the American Financial Services Industry

Felix - - -

There needs to be accountability for this crisis. If the government was an enabler, fix the government. If there is any question about possible illegal activity in the financial sector, investigate. If anything is "too big to fail", break it up. Above all, regulate lobbying in a way that (1) assures transparency and (2) makes all lobby activity public record and (3) provides a mechanism for public input to (support or counter) all lobbying activity.

You have written a good article. The position of Mr. Yousefzadeh does not make sense. Do we expect that the perpetrators of this mess (or the enablers, or the unaware who should have known) are the best to fix the problems and define the new financial system structure? I think not.

Zatzright - - -

I'm sorry, but your comment doesn't make sense to me.

The Latest on Bank Nationalization

Just how will we prevent "too big to fail" in the future? Will we have new anti-trust laws? How can this be done without restricting unnecessarily new entrepenurial ventures that require very large capitalization? Some things require very large scale to be effective.

I agree that allowing the creation of a few giant corporations that effectively "take over the country" needs to be prevented. Can someone tell me how to do it?

This was a good article that raised some major questions for me.

Wall Street Breakfast: Must-Know News

Watch AIG. This could be the model for C.

Every Consensus Must End

With all the debate on nationalization in one form or another, what about a completely different idea: Force the biggest banks to divest. This would require new legislation, I believe. New laws could require any bank with assets more than some level, say 10% of GDP (readers, suggest any other amount you think is appropriate) to split into two or more independent parts to get under the legislated limit. This forces the banks to make assessments of their assets, probably splitting into "good" banks and "bad" banks. The taxpayer doesn't have to fund the whole process and we can have bankruptcy resolutions where necessary for the "bad" banks because none are any longer "too big too fail".

There may be some serious problems with this proposal, but I don't see them at this point. Maybe some other reader(s) will point them out.

Bank Nationalization: It's Just Plain Wrong

Dr. Baker, from everything I've read, I think a lot of people agree that all that is needed to sort out the bank crisis is time, which is your central thesis. What is missing from your otherwise fine article is a discussion of how to buy time. Would you propose:

1. Changing the accounting rules (ie, suspend mark to market)?

2. Having the government provide more loan guarantees?

3. Having the government make more capital investments in banks?

4. Some other action different from the three above?

Where's the Nationalization Debate?

Good discussion. I would ask one question of Eskin: Are you in favor of letting banks fail and have the taxpayers forfeit the $8T plus put up in equity, loans, loan guarantees and bailouts? We have a mess and now we have to clean it up. Eskin, you are speaking on principle. That is good. If we had principles we wouldn't have gotten into this mess. The question now is how to fix the result of unprincipled action. I think it should be done in a way that preserves as much as possible, especially when it comes to my taxpayer money.

Solving the Bank Crisis: More TARPs Are Not the Answer

These ideas need to be discussed and developed into some actionable plan. Jimmy Lathrop is exactly right:

"...these bank executives...hold a knife to the throat of the American banking system at the expense of the taxpayer,..."

JPMorgan: A Better Acquirer than Bank of America

Losses at WaMu have been swept under the rug (i.e. written off before the merger). The rest of the balance sheet will not be so easy to deal with post merger. JPM is not out of the woods.

BAC is still going into the woods.