Posted on 04/19/2009 6:56:03 PM PDT by zaphod3000
WASHINGTON — President Obama’s top economic advisers have determined that they can shore up the nation’s banking system without having to ask Congress for more money any time soon, according to administration officials.
In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.
Converting those loans to common shares would turn the government aid into available capital for a bank — and give the government a large equity stake in return.
While the option appears to be a quick and easy way to avoid a confrontation with Congressional leaders who are wary of putting more money into the banks, some critics would consider it a back door to nationalization, since the government could become the largest shareholder in several banks.
SNIP
The change to common stock would not require the government to contribute any additional cash, but it could increase the capital of big banks by more than $100 billion.
(Excerpt) Read more at nytimes.com ...
Raise your hand if you DIDN’T see this coming.
That's the Ticket
More Creerie Newz
Here it comes Folks! Socialism 101, it’s a Pass/fail course. Freshman year non honors course.
They can force the banks to issue more common stock - to be issued only to a specific party ?
The day my bank is owned by Tim Geithner & Co. is the day I close my account and put it into one of the many small Texas banks that did not get any TARP funds. I refuse to do financial business with a Leftist government.
That’s a sure way for the banking system to collapse. Who trusts the government when they can break an agreement at any time? If I’m an investor in one of these banks, I’d pull my money out tomorrow.
Insanity.
At some point those socialists will use their “equity position” as a mechanism to stop the mortgage interest deduction.
Paging Dick Armey. This is as Unconstitutional as anything done since our nation was founded.
Preferred shares are convertible into common shares at a set price. This is common financial transaction, except usually the government is not involved. ;)
Horrifying. Of course, for now, this is just another one of Geithner’s infamous “trial balloons”, to gauge market reaction.
Who Is John Galt?
Many saw this coming decades ago.
“In a significant shift”...
Significant shift? Who see’s this as a shift? This has been the direction all along.
The useless idiots in the MSM are working hard to spin Maobama’s Marxist ways.
I don’t understand this graph. Could you give a simple explanation?
Much appreciation.
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