Barry’s suggestions about what to do….
by Tom on February 9, 2009
in Market Musings, banks
I’ve been a big fan and reader of Barry Ritholtz for quite some time. Listed below are what he’s suggesting should be proposed tomorrow. Makes a lot of sense to me. What do you think?
Tom Vanderwell
Media Appearance: CNBC’s Fast Money (2/9/09) | The Big Picture
My suggestions:1. Stop Regulatory Capture: Saving the banks should not be the goal; Saving the finacnial system, credit operations and taxpayers should be. No more “sweetheart” deals for the incompetant creators of the mess!
2. Bank Aggregator: Federal assistance to the private equity sector buying toxic assets sounds like a bad deal for taxpayers: We have all the risk, but private equity has all the upside;
3. Good Bank/Bad Bank is a stop gap measure. The banks that are insolvent should not be rescued. Let the mortally wounded banks die, and spin out their best components — adequately capitalized, with zero debt!
4. Foreclosure Mitigation will only work if we recognize that a modest amount of delinquent homes can be saved from foreclosure; Unfortunately, the days of easy credit put too many people in homes they could not possibly afford;
5. Expanded Insurance Wrapper: Has not worked. The Bank of America and Citigroup bailouts had the US taxpayer guarantee the bad paper; The banks still went to hell, until yet another rescue plan materialized;
6. Transparency in Governance is a good idea; Does this mean the Fed will be revealing what paper they are holding?
7. Stress test? Saving Isn’t that suppsoed to be happening already with these banks via the FDIC?
