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2008-10-11 Home Front Economy

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Posted by tipper 2008-10-11 03:25|| || Front Page|| [1 views ] Top

#1 SSRA?

Posted by g(r)omgoru 2008-10-11 07:38|| 2008-10-11 07:38|| Front Page Top

#2 A US Congress committee also announced today that it will expand its probe into the causes of the financial crisis next week by calling on leading investment managers to testify, a leading Congressman announced today.

In other news... mysterious force shatters Congressional cloakroom mirrors.

Posted by Besoeker 2008-10-11 09:49|| 2008-10-11 09:49|| Front Page Top

#3 Paulson Plan

1. Give billions of taxpayer money to undeserving companies.
2. ?
3. Dow 15,000!!111!!

Posted by Scott R 2008-10-11 10:58|| 2008-10-11 10:58|| Front Page Top

#4 So basically Paulson is following the Swedish precedent:

During 19911992, a housing bubble in Sweden deflated, resulting in a severe credit crunch and widespread bank insolvency. The causes were similar to those of the subprime mortgage crisis of 20072008. In response, the government took the following actions:

Sweden's government assumed bad bank debts, but banks had to write down losses and issue an ownership interest (common stock) to the government. Shareholders were typically wiped out, but bondholders were protected.
When distressed assets were later sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies in public offerings.
The government announced the state would guarantee all bank deposits and creditors of the nations 114 banks.
Sweden formed a new agency to supervise institutions that needed recapitalization, and another that sold off the assets, mainly real estate, that the banks held as collateral.
This bailout initially cost about 4% of Sweden's GDP, later lowered to between 02% of GDP depending on various assumptions due to the value of stock later sold when the nationalized banks were privatized.
(en.wikipedia.org/wiki/Bailout#Swedish_banking_rescue)

Posted by L1011 2008-10-11 16:05|| 2008-10-11 16:05|| Front Page Top

#5 Putting equity in the banks?

That amounts to turning them into GSEs. That worked real well for Fannie and Freddie, didn't it?

Just wait until the congresscritters get their fingers into B of A or Citi.

We are all doomed.

Posted by Skunky Glins 5***">Skunky Glins 5*** 2008-10-11 21:45|| 2008-10-11 21:45|| Front Page Top

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