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To: orkrious who wrote (185630)	2/21/2009 5:06:52 PM
From: Kona	Respond to of 306849

Brits going the good bank/bad bank route plus overt printing <g> business.timesonline.co.uk

To: orkrious who wrote (185630)	2/21/2009 5:41:52 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 306849

Nationalization is a bit too imprecise, though, and it's a buzzword that's been tossed around. I agree that if Strangelove comes up with anything that seems like it might work, the market will respond favorably. Including a Buiter-Meredith Whitney kind of plan, ie, absorb the insolvent banks if they fail the stress test.... and liquidate the bad assets over time a la RTC. Then focus on capitalizing the survivors (without necessarily forcing them to take government funds in exchange for equity i.e, no broad nationalization). The sooner the better, IMO. This puts the bad liabilities on the taxpayers, but realistically they are there anyway. At least it quarantines them from the rest of the banking system, allowing it to function more freely. I think this will be a great deal more expensive than Buiter estimated though, probably multi-trillions instead of 350 billion, but that remains to be seen. If something like this is implemented, you'd want to own the stocks of likely survivors ahead of the announcement. We should probably be trying to identify them as a potential speculative trade.

To: orkrious who wrote (185630)	2/21/2009 7:58:01 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

The entire concept of "nationalization" is merely an alternative to providing additional funding and staff to the FDIC. Either someone thinks the FDIC is not up to the task of doing a Bank Failure Friday on Citibank and BofA, or they have a problem lending more taxpayer funds to the FDIC. In either case, trying to find an alternative to the FDIC seems odd and unnecessary to me. .

To: orkrious who wrote (185630)	2/22/2009 4:10:41 AM
From: stockman_scott	Respond to of 306849

Soros Says Financial Crisis Marks End of a Free-Market Model By Walid el-Gabry Feb. 21 (Bloomberg) -- Billionaire investor George Soros said the current economic crisis has its roots in the financial deregulation of the 1980s and marks the end of a free-market model that has since dominated capitalist countries. Liberalization of the financial industry begun by the Reagan administration has led to a series of breakdowns forcing government intervention, Soros told economists and bankers last night at a private dinner at Columbia University in New York. The global recession, triggered by the collapse of the U.S. housing market, has “damaged the financial system itself,” he said. Regulators are in part to blame because they “abrogated” their responsibilities, Soros, 78, said. The philosophy of “market-fundamentalism” was now under question as financial markets have proved to be inefficient and affected by biases rather than driven by all the available information, he said. “We’re in a crisis I think that’s really the most serious since the 1930s and is different from all the other crises we have experienced in our lifetime,” Soros said. Soros, founder of New York-based hedge-fund firm Soros Fund Management LLC, said last month at the World Economic Forum in Davos, Switzerland, that the Obama administration’s plan to buy toxic assets from U.S. banks won’t be enough to get financial institutions to start lending again. A more effective approach for restarting the economy would be to inject capital directly into the banks and cut minimum capital requirements, Soros, whose firm oversees $21 billion, has said. Soros’s Quantum Endowment Fund returned 8 percent last year. That compared with an average loss of 18 percent by hedge funds, according to data compiled by Hedge Fund Research Inc. of Chicago. To contact the reporter on this story: Walid el-Gabry in New York at welgabry@bloomberg.net Last Updated: February 21, 2009 16:52 EST