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“I have never seen so much time filled with so much sorrow for so many in the US and around the World.” – cricketdiane

I watched show after show over the past four days parade experts that they asked, “What will happen if they nationalize our banks? Will they nationalize our banks? There’s talks of them nationalizing our banks, how will that work? What do you think of them nationalizing the banks?”

News hour after news hour has been filled with it on every station, from every team of “reporters” and anchors, every cable news hour and asked of nearly every “expert” available to speak about anything.

Then last night, I really tried to listen for where this had started – but it was like, “a source near a person who heard it for certain,” kind of thing. And in the middle of the night, while markets around the world were making decisions about their investments, even bloomberg had a remark on the ticker that said, “Obama’s nationalization of the banks, whatever, whatever, whatever.”

From what I can tell without running all over the internet to find it, Chris Dodd had made a (one more stupid) comment late last week about the US having to nationalize the banks however undesirable that may be. And, the Obama administration had published a statement that banks would remain private – nationalization would not be considered an option, (which may or may not be true after all is said and done.)

Apparently, according to one news story played once across the last four days, the Wall Street Journal had pushed the story which was loosely based on something someone had said who was “close to the situation.” Then, early this morning, there was a story about Pandit of the Citigroup requesting the Fed convert their preferred shares bought as part of the TARP bailout, into common shares. And, in that story there was a quick explanation that Geithner was meeting with them to consider that action – (also maybe.)

What surprised me most of all has been the propensity of news producers and staff teams to report a story based on what is essentially “water-cooler” talk as if it is based on facts, the willingness of so many shows to carry it as if it is based on facts and the quick push to consume the airwaves with the “see what Obama and the Democrats are doing – they are going to nationalize the banks” opinion mongering.

There are several problems with this – the first of which is that I resent news organizations using the news broadcast opportunity to manipulate public sentiment on something that isn’t based on facts or reality. Second, it is inherently wrong to convey “news” stories that are not based on facts but rather on something someone said who might know something about it close to the source who might be making a decision on it sometime soon, maybe.

And, third  – more than anything else – how do they call themselves news organizations when the basic facts of the situation are being denied? The banks are the ones that put themselves at serious risk and they put ( not their money ), but ours at risk – both in our deposits and investments with them, and our hundreds of billions of tax dollars used to bailout their insolvency and lack of liquidity – lack of capital to back their leveraged obligations, their choices.

The Republicans and Democrats have certainly contributed to this mess over the years through the unwillingness of Congress to act on necessary regulations and to demand the enforcement of existing regulations.

Both parties have made their own significant contributions to allow these failed policies to exist that were feeding money to banks and investment banks for their continued operations through grants and other subsidies while allowing them to do any damn thing they wanted without hindrance nor concern for the public good.

Now, the facts are these – the nationalization of our banks (in particular, the large mega-conglomerates that are virtually insolvent) is a moot point. The actual “back-door nationalization” being discussed on news shows happened last fall when TARP moneys were used in the manner they were used. That isn’t news and isn’t today.

These banks haven’t been operating in a truly capitalist free market structure for most of the past thirty years, anyway. If they had not been given access to piles of free government money through grants and subsidies and other incentives over the course of that time, they wouldn’t have survived with a real bottom line profitability in a basic capitalist model.

These mega bank conglomerates aren’t profitable in a very basic sense because of the ways in which they have used their (our) assets to generate profits in what amounts to a shell game or Ponzi type scheme. Their leverage has been imprudent to a ratio of 40:1 and some investment / financial institutions have been leveraged up to 73:1. That is not banking – that is organized crime.

Those are the facts. What is also a fact is this – our government needs to submit these banking organizations to the process that determines anti-trust violations, oligopoly, monopoly and those rigors which are already in place and used commonly when organizations request to merge – will show the truth of the situation. They are qualified, the systems are already in place and they know what they are doing when analyzing assets and leverage / asset classes and the capital backup that should be in place for each.

Take this mess out the hands of the same old, same old banking system inanities and put it under the rigors of actual accrual purview by the anti-trust division – and things will get different. Then, real solutions can make a difference that include sensible and prudent conversions from what we have now to what we need for the future of a stable and prosperous national future.

The other thing I noticed that should have been covered by the news is that last week there were US assets being dropped into the market by China – they were selling them and then when Clinton asked about their continuing to buy our bonds, they said something about the decision being based on the liquidity of the assets they already have. This should have been given a big place on the news with an explanation of what these things mean. But now, here we are.

– cricketdiane. 02-23-09