(no subject)

Feb 15, 2009 20:19

Bill Moyers was great on Friday.
He had on a past chief economist for the IMF (International Monetary Fund), who said that the extreme dislocation in our financial system is very reminiscent of similar crises in third world, or emerging markets economies.
He also pointed out that the root cause of all this is the power of certain oligarchies: in this case, the CEOs of the big banks.
He went on to talk about the " stress test" that Timothy Geithner, the new Treasury Secretary, plans to do with these banks.
In his opinion, he said that he thought that all the big banks would fail this stress test, and, when they did, they should be given, say, 60 days either to raise enough private equity capital to make themselves solvent, or the FDIC should then step in and "take their banking credentials away" because of insolvency.
This would mean that the government would take over the banks, and bring them gradually back into solvency, so that they could be broken up, and sold back to private equity firms.
This would also mean that the oligarchs would almost certainly lose their jobs and positions of power. It would also mean that the various banking organizations that would come about due to the breaking up of the big banks would no longer be "too big to fail".
After all, as one of the congressional committee grilling the eight CEOs of the largest banks sid:
"If they're too big to fail, then they're too big to exist".
Sounds like a good plan to me. We might even make money out of it as well!
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