contrariwise

Warren's (Ridiculous) Prescription for Banks: Wipe Out Shareholders, Fire CEOs

Of all of those banks that were herded into the hushed room and told to take the money, some needed it and some didn't. The ones that needed it didn't want to identify themselves as needy. The needy banks probably had something to do (put a bug in Paulson's ear?) with how the scheme was set up, where all, not just the needy, took so that the weakest were not clearly identified. If a bank was competently run and has adequate capital, they should be able to refund the bailout money. Put up or shut up. If your bank can't cough up the public money, then your bank is undercapitalized and the value of the common equity is doubtful. Undercapitalization is evidence of poor risk control, which indicates incompetent management. So prove your competence by coughing up from your well capitalized bank. If you can't do that because your bank is undercapitalized, then you walk the plank. It's not fair to expect average joes and janes to indemnify management's gold plated compensation schemes when a bank has massive llosses made as a result of poor managment decisions. Incentive pay should reward positive results, not be doled out just for showing up and running your ship onto the rocks. Pay for performance. No performance, no incentive pay. Management of banks that take public funds are civil servants.

Probe of Citigroup et al Could Hit Financial ETFs

mikeg3 - a key contention of these investigations will be that these banks were touting these products with increasing intensity, foisting them on naiive investors, when they knew that the market for these securities was freezing up. They made claims that they knew to be false at the time they made them. I don't think the cases will deal with sales made when the markets were liquid or even when the banks thought in good faith the market had a temporary problem. They will focus on time periods when the prosecuters can PROVE that the banks LIED. If the investing public comes to believe that the markets are rigged then the markets will cease to function. Mark my words.