Sunday, March 29, 2009

8000 banks

Here's the Newsweek piece on Paul Krugman. This bit irked me:
Krugman's suggestion that the government could take over the banking system is deeply impractical, Obama aides say. Krugman points to the example of Sweden, which nationalized its banks in the 1990s. But Sweden is tiny. The United States, with 8,000 banks, has a vastly more complex financial system. What's more, the federal government does not have anywhere near the manpower or resources to take over the banking system.
Has anyone talked about taking over 8000 banks?

In point of fact, the FDIC has put an awful lot of smaller banks in receivership. Somehow, it has found the manpower.

10 comments:

Anonymous said...

Evan Thomas is a hack and one of the primary reasons that 15 years ago I let my subscription of 20+ years lapse. I haven't missed it.

Thanks for all you do Joe.

Peter of Lone Tree said...

The Bank-Implode-O-Meter:
The 21st “official” bank implosion of 2009 was centered on Georgia, yet again (Georgia must be on the FDIC’s mind, for sure), as Omni National Bank stepped up to the plate and was knocked down.

Anonymous said...

I agree with Krugman, but the 8,000 bank comment relates to the fact that few banks control most of the banking in the U.S., hence if Citi, BofA, and other teetering banks were nationalized, it would be as if more than half of the banks were nationalized. The Gramm-Leach-Bliley Act destroyed our old banking system, making room for too-big-to-fail banks that undermined the whole system.

Hoarseface said...

Krugman addressed this subject specifically on his blog a few weeks back - see: http://krugman.blogs.nytimes.com/2009/03/04/how-many-banks/

Hoarseface said...

Joe,
If you haven't already seen this, I'd highly recommend it, particularly if you read the "Dear AIG, I Quit!" letter in the NYT this week.
http://www.smirkingchimp.com/thread/20988
It's Taibbi's response to the Dear AIG letter.
If you missed his recent piece in Rolling Stone, "The Big Takeover" I'd strongly recommend it as well.

Anonymous said...

You obviously don't understand high finance.

If you owned a bank you would understand why bailouts and not bankruptcy is the correct way to go.

(my banker told me to write this)

Sextus Propertius said...

In the four-day "bank holiday" declared by FDR, over 5,000 banks were audited and cleared to reopen (see:
http://en.wikipedia.org/wiki/Emergency_Banking_Act
) - by *hand* and without computers. Several thousand more were found to be insolvent and closed. It would be a lot easier to do this now than in 1933. There are a lot fewer banks in the country, and they can be audited much more quickly by computer than by pencil and paper. Anyone who says differently is bought and paid-for.

Gary McGowan said...

Matt Taibbi's Rolling Stone piece is essential reading.

As someone observed elsewhere, "If this doesn't start the perp walks, nothing will."

Gary McGowan said...

"Somehow, it has found the manpower."

Putting the whole banking system into receivership is quite doable. What we need is someone with credibility in this area to explain how it would be done.

Maybe Matt Taibbi or someone like him could get the story writ and out.

Anonymous said...

There is one huge mistake that "We The People" seem to be making. The mistake is in thinking that the various divisions of the Federal Government when employed are a good thing because we TRUST(???!) them. Anyone reading around the internet will quickly learn that in just about every division, there is wide spread corruption.

I know from being in that famous family for more than 26 years that the FDIC has more corruption than anyone can count. Frankly it's also in bed with the Big Banks who by the way are among the Leaders in collapsing our Economy. Remember that the family explained about the coming economy collapse in the mid 90's.

How I know may surprise everyone since the family early on joined with two other wealthly friends and started their own bank. It was in operation for only less than a year. How it went down is because of resulting connections for a setup to steal more money than the bank had in assets in one move. This move on this new bank was principly by design to collapse the bank. The family later said after hiring a private investigation that it was the big banks who didn't want them around and collapsing them was the only way to get rid of them. So who was involved in collapsing this Bank? The FDIC was (still is) in bed with the MOB who are linked with The COMBINE and also linked with a huge criminal element within the Federal Government. The Bank name that was setup to be collapsed is known as Dempster Plaza Bank in Niles Illinois. It was across the street from Lutherin General Hospital on the Corner of Greenwood and Dempster ave. This happened in the later 70's and the Bank President for his part in the setup paid with his life.

I really believe what needs to happen is to as "thoroughly as possible" clean up our Federal Government. Any added extentions of any separate division to our Government gurantees to be met with a higherlevel of corruption along with giving them even more power.

If your children were as deceitful and criminal as these people are, how would you approach resolving this? Forget TRUSTING and start cleaning the mess up before giving them anymore power.

Marty Didier
Northbrook, IL