Fed to take ownership interests in banks

[MadeInTaiwan]

[quote=patientlywaiting]Paul Krugman, my favorite economist wins the Nobel.

http://www.latimes.com/news/nationworld/world/la-fg-nobelecon14-2008oct14,0,5347677.story

…

Krugman said the major European economies have “in effect declared themselves ready to follow Britain’s lead, injecting hundreds of billions of dollars into banks while guaranteeing their debts.”

“And whaddya know,” Krugman continued, “Mr. Paulson — after arguably wasting several precious weeks — has also reversed course, and now plans to buy equity stakes rather than bad mortgage securities.”
[/quote]

Did you read Slate’s reprint of one of Krugman’s articles reducing finacial cycles to baby sitting coop? http://www.slate.com/id/2202165/

[HereWeGo]

Hmm … Paulson and co. forced all 4 monster banks – C, WFC, JPM, and BAC – to take $25B “injections” so that the weak bank would not be singled out.

Let’s see now:

WFC has positive earnings and swallowed all of WB without an FDIC backstop.

BAC has positive earnings and swallowed both CFC and MER.

JPM has positive earning and swallowed BSC (admittedly with the Fed’s backstop) and WM (minus WM debt.)

C has negative earnings.

Now which bank was Paulson trying to protect? Maybe Sen. Schumer could help us out with this one.

One of these banks is not like the others …

[HereWeGo]

Hmm … Paulson and co. forced all 4 monster banks – C, WFC, JPM, and BAC – to take $25B “injections” so that the weak bank would not be singled out.

Let’s see now:

WFC has positive earnings and swallowed all of WB without an FDIC backstop.

BAC has positive earnings and swallowed both CFC and MER.

JPM has positive earning and swallowed BSC (admittedly with the Fed’s backstop) and WM (minus WM debt.)

C has negative earnings.

Now which bank was Paulson trying to protect? Maybe Sen. Schumer could help us out with this one.

One of these banks is not like the others …

[HereWeGo]

Hmm … Paulson and co. forced all 4 monster banks – C, WFC, JPM, and BAC – to take $25B “injections” so that the weak bank would not be singled out.

Let’s see now:

WFC has positive earnings and swallowed all of WB without an FDIC backstop.

BAC has positive earnings and swallowed both CFC and MER.

JPM has positive earning and swallowed BSC (admittedly with the Fed’s backstop) and WM (minus WM debt.)

C has negative earnings.

Now which bank was Paulson trying to protect? Maybe Sen. Schumer could help us out with this one.

One of these banks is not like the others …

[HereWeGo]

Hmm … Paulson and co. forced all 4 monster banks – C, WFC, JPM, and BAC – to take $25B “injections” so that the weak bank would not be singled out.

Let’s see now:

WFC has positive earnings and swallowed all of WB without an FDIC backstop.

BAC has positive earnings and swallowed both CFC and MER.

JPM has positive earning and swallowed BSC (admittedly with the Fed’s backstop) and WM (minus WM debt.)

C has negative earnings.

Now which bank was Paulson trying to protect? Maybe Sen. Schumer could help us out with this one.

One of these banks is not like the others …

[HereWeGo]

Hmm … Paulson and co. forced all 4 monster banks – C, WFC, JPM, and BAC – to take $25B “injections” so that the weak bank would not be singled out.

Let’s see now:

WFC has positive earnings and swallowed all of WB without an FDIC backstop.

BAC has positive earnings and swallowed both CFC and MER.

JPM has positive earning and swallowed BSC (admittedly with the Fed’s backstop) and WM (minus WM debt.)

C has negative earnings.

Now which bank was Paulson trying to protect? Maybe Sen. Schumer could help us out with this one.

One of these banks is not like the others …

[FoamFinger1]

With the Guv’t taking partial equity positions, Why hasn’t Wall Street and the ratings agencies and investors realized existing equity positions have now been diluted? and share prices go up after the capital infusion? Why?

Another point,
If we consider the off balance sheet liabilities these banks have as a “shadow liabilty” the banks’ do not recognize until it is comfortable/less damaging to them, Can the infusion of Fed captial now be considered a “shadow equity” position?

Finally,
Considering how senators et al, have summer vacations on tax payer money with no regrets, how can we expect them to exert any force, control or expect any change in a banks’ behavior simply by saying ‘we have an equity stake in these institutions now’?

(…wow, where did all that come from…)

/rant off.

[FoamFinger1]

With the Guv’t taking partial equity positions, Why hasn’t Wall Street and the ratings agencies and investors realized existing equity positions have now been diluted? and share prices go up after the capital infusion? Why?

Another point,
If we consider the off balance sheet liabilities these banks have as a “shadow liabilty” the banks’ do not recognize until it is comfortable/less damaging to them, Can the infusion of Fed captial now be considered a “shadow equity” position?

Finally,
Considering how senators et al, have summer vacations on tax payer money with no regrets, how can we expect them to exert any force, control or expect any change in a banks’ behavior simply by saying ‘we have an equity stake in these institutions now’?

(…wow, where did all that come from…)

/rant off.

[FoamFinger1]

With the Guv’t taking partial equity positions, Why hasn’t Wall Street and the ratings agencies and investors realized existing equity positions have now been diluted? and share prices go up after the capital infusion? Why?

Another point,
If we consider the off balance sheet liabilities these banks have as a “shadow liabilty” the banks’ do not recognize until it is comfortable/less damaging to them, Can the infusion of Fed captial now be considered a “shadow equity” position?

Finally,
Considering how senators et al, have summer vacations on tax payer money with no regrets, how can we expect them to exert any force, control or expect any change in a banks’ behavior simply by saying ‘we have an equity stake in these institutions now’?

(…wow, where did all that come from…)

/rant off.

[FoamFinger1]

With the Guv’t taking partial equity positions, Why hasn’t Wall Street and the ratings agencies and investors realized existing equity positions have now been diluted? and share prices go up after the capital infusion? Why?

Another point,
If we consider the off balance sheet liabilities these banks have as a “shadow liabilty” the banks’ do not recognize until it is comfortable/less damaging to them, Can the infusion of Fed captial now be considered a “shadow equity” position?

Finally,
Considering how senators et al, have summer vacations on tax payer money with no regrets, how can we expect them to exert any force, control or expect any change in a banks’ behavior simply by saying ‘we have an equity stake in these institutions now’?

(…wow, where did all that come from…)

/rant off.

[FoamFinger1]

With the Guv’t taking partial equity positions, Why hasn’t Wall Street and the ratings agencies and investors realized existing equity positions have now been diluted? and share prices go up after the capital infusion? Why?

Another point,
If we consider the off balance sheet liabilities these banks have as a “shadow liabilty” the banks’ do not recognize until it is comfortable/less damaging to them, Can the infusion of Fed captial now be considered a “shadow equity” position?

Finally,
Considering how senators et al, have summer vacations on tax payer money with no regrets, how can we expect them to exert any force, control or expect any change in a banks’ behavior simply by saying ‘we have an equity stake in these institutions now’?

(…wow, where did all that come from…)

/rant off.

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