Hale, my problem is that off book toxic assets are not factored into the true health picture of the banks, and without that data it makes it hard to gauge the proper approach to their fate. I mean, the Banks may seem to be in good shape sans the toxic assets data, but that is an unreasonably rosy picture.
I was for Nationalization of Banks initially, but your arguments adjusted my opinion on that. William K Black, in his interview with Bill Moyers, mentioned that receivership, which I believe the FDIC engaged in twice this weekend alone, never ceased to be an option for the Big Banks as well. I do not believe a prolonged period of Government Control would be appropriate for the Banks because of issues you raised, but going forward in the current approach isn't feasible in the long term either.
How about this? What if the Government were to take these big Financial Services Corporations into receivership long enough to split them up into their Banking, Insurance, and Investment lines and then relinquish control? Currently we have a situation where money is given to aid the banks but is finding its way into the Investment loss area ... I'm thinking that is why we aren't seeing the kind of success from TARP we had hoped. If we split the Banking units off, money given to the Banks will stay with the Banks.
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