Category Archives: bailouts

I got an interesting response from one reader to my post on whether healthy banks should be able to give back TARP funds. Here it is, with permission; the short version is basically "no". The TARP preferred shares were extended … Continue reading →

John Hempton has 5,155 words on bank insolvency today, and makes the good point that "insolvency" is not well-defined. So what do I mean when I say that some big banks are insolvent? I mean that when you look at … Continue reading →

After Tim Geithner’s uninspired and uninspiring performance today, Barack Obama stepped up to show him how questions about nationalization should be answered: TERRY MORAN: There are a lot of economists who look at these banks and they say all that … Continue reading →

Jeff Sachs has a slightly peculiar idea for nationalizing banks, which he calls "contingent nationalisation". As best I can work out, it involves the government buying up toxic assets at par, and then selling them off over the course of … Continue reading →

Tyler Cowen has a new argument against nationalization: Say that banks are in the red by $2 trillion for ever and all eternity. Taking over the banks simply means that the government picks up these losses as owner. Government ownership … Continue reading →

There’s a lot of words but less actual news in the NYT’s big report today on Tim Geithner and his plan for the US banking system. But one thing does interest me, given the extent to which Warren has been … Continue reading →

I’ve been having a look at Nouriel Roubini’s estimate of a total of $1.8 trillion of losses in the US banking system, compared to just $230 billion in TARP recapitalizations to date and $200 billion of new money from private-sector … Continue reading →

Jim Surowiecki provides proof that I’ve been writing too much and too hastily about bank nationalization of late: At one point, Felix describes nationalization as "elegantly" putting an end to the current morass, while at another he describes it as … Continue reading →

I’m not sure why I bothered writing my blog entry on nationalization last night, since Paul Krugman wrote essentially the exact same thing, only more concisely and with much greater elegance. Still, I did get some interesting comments, both on … Continue reading →

Kevin Drum is a bit like Joe Nocera: he’s reluctant to nationalize, but he doesn’t really say why. It’s wise to be wary of nationalization. It should be a last resort, and I’ve gotten a sense recently that a lot … Continue reading →

Joe Nocera says he’s looking for a bold new plan to tackle the financial crisis — but the one he spends essentially his entire column talking about is the creation of a government-owned "bad bank" — an idea which is … Continue reading →

The CBO has done the hard work of marking to market all the assets purchased with TARP funds, including preferred stock in various banks. It concludes that today’s mark-to-market value of the $247 billion spent in 2008 is just $183 … Continue reading →

Justin Fox likes Jack Guttentag’s argument as to why it makes sense for banks to sit on TARP funds rather than lending them out. I don’t. Guttentag defines a bank’s capital as "the difference between its assets and its debts", … Continue reading →

GMAC says it’s still "tabulating" the results of its bond exchange, which means we still don’t know whether the crucial 75% hurdle has been reached. If it isn’t, then what? On Friday morning, the answer was clear: The deadline for … Continue reading →