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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bruiser98 who wrote (101540)	2/21/2009 9:45:40 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 110194

Upon reflection, I think the appeal of "nationalization" over an FDIC take-over may be because it can hide the size of the problem. The FDIC would have to explicitly come up with the capital to stabilize a bank like Citi. The Treasury could stabilize the bank with merely the imputation of the full faith and credit of the U.S. government without having to put a number on that. Assuming the problem gets better over a long time as asset prices rise, the final reported number can be far smaller than the full amount of capital which would have been required. If the number gets larger, at least the release of this number is delayed for years. .