Market to Obama: Put Bad Banks Out of Their (and Our) Misery

[Beet]

Even a blind squirrel finds a nut now and then, or so the saying goes. But this stock market seems unable to sustain any kind of rebound, even after hitting 12-year lows yesterday and with the "excuse" the jobs numbers weren't worse than feared.
The stock market is "oversold" but "in a fix" over a growing awareness of the dire state of the global economy and its lack of confidence in the Obama administration's handling of the banking crisis, says Nariman Behravesh, chief economist at IHS Global Insight.

Behravesh, author of Spin-Free Economics, gives Obama good (or at least passing) grades for the stimulus package and the mortgage rescue plan announced this week. While neither are perfect, they each will have the desired effect to some degree, he says.

But the administration needs to take "more radical" steps in dealing with the financial crisis, Behravesh says. Thus far, Tim Geithner is sticking to a view that toxic assets are merely temporarily depressed and the market merely suffering from a lack of confidence. But the administration needs to recognize the issue is insolvency and that fully nationalizing insolvent banks is better than the current piecemeal approach, the economist says.

Behravesh believes the market could put in a V-shaped recovery if Obama and Geithner (as well as Bernanke) end this period of "protracted uncertainty" and own up to the harsh reality -- instead of pretending they can put Humpty Dumpty together again.

http://finance.yahoo.com/tech-ticker/article/202783/Market-to-Obama-Put-Bad-Banks-Out-of-Their-(and-Our)-Misery?tickers=%5Edji,%5Egspc,SPY,DIA,XLF,BAC,C

[Marokai Backbeat]

We have to do something serious, either nationalize or let them fall, but propping up zombie banks is not going to be and so far hasn't been anything but a waste of money with no results. The problem is the administration is too afraid to actually make big steps.

[CultureKing]

We have to do something serious, either nationalize or let them fall, but propping up zombie banks is not going to be and so far hasn't been anything but a waste of money with no results. The problem is the administration is too afraid to actually make big steps.

Agreed, take 'em over or let them die

[dead0man]

Some people have been saying "let them die" since the beginning.  We were told they were "too big to fail" though and were told how horrible things would be if we did.  It's good to see new people on our wagon, come, join the band.

[opebo]

Stop putting words in "the market's" mouth.  No one knows precisely what a panicked mob is 'saying' other than that - 'We're scared'.

[Beet]

Some people have been saying "let them die" since the beginning.  We were told they were "too big to fail" though and were told how horrible things would be if we did.  It's good to see new people on our wagon, come, join the band.

It should be noted that between letting them die and insufficiently capitalizing them with partial bailouts, (which is what we are doing now) the latter is only a slower and less complete means of achieving the former.

[CultureKing]

Some people have been saying "let them die" since the beginning.  We were told they were "too big to fail" though and were told how horrible things would be if we did.  It's good to see new people on our wagon, come, join the band.

Also some of the banks are too big to simply let die. If we had let Fannie and Freddie die last year we would be in the midst of a depression possibly rivaling the Great Depression.

[○∙◄☻¥tπ[╪AV┼cVê└]

The obvious thing to do is prop up the FDIC, and liquidate the deadwood banks, and see if there are any crimes to charge their management with.

[CARLHAYDEN]

The obvious thing to do is prop up the FDIC, and liquidate the deadwood banks, and see if there are any crimes to charge their management with.

Jfern is correct!

Oh, and, some free market supporters have adapted the old Iranian chant to:

Die, Die, AIG

Die, Die, Citi

Die, Die AIG

Die, Die Citi

Simple lyrics, but, a good idea.

[Mint]

The obvious thing to do is prop up the FDIC, and liquidate the deadwood banks, and see if there are any crimes to charge their management with.

Jfern is correct!