TPMtv: A Talk With Dean Baker, Part Two

Your Daily Politics Blog: In the second part of my interview with economist Dean Baker, we talk about the fact that a significant portion of the banking industry is already insolvent and that a much larger portion will be broke before the end of the year. Any discussion of nationalization -- or any denial that we're nationalizing the banks -- needs to start with the premise that if you're not going to let the banks declare bankruptcy then you're nationalizing them at some level. Who takes the bigger hit: taxpayers or shareholders? It depends on how you do it. Dean Baker explains.

Category:

News & Politics

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• tpmtv talks
• david kurtz
• dean baker
• nationalization
• bankrupt
• stimulus
• politics
• video blog

[NanoLopez2]

How badly mismanaged these banks have been. Once upon a time 23% interest was illegal. Now they go bankrupt charging this. Exorbitant ATM fees, bounced check fees, over limit fees, even fees for using a live tellers, and they are going bankrupt. What a bunch of assholes. If they charged everyone 5.9% interest for a house instead of gambling and playing games they wouldn't have such a stockpile of REO's. They aren't bankrupt. They're just property owners and they don't want to be. Jerks.

[mtolives]

Dean Baker for Congress!

Peace. Jobs. Justice.

[WadeBlazingame34]

U2Berror: Their liabilities exceed their assets. That equals Bankruptcy.

[U2Berror]

How are these banks bankrupt!? I don't buy it!

[TECHKLEC]

There are just too many toxic assets in the system for any kind of recovery in the near future. All I can say is that I'm glad I don't need to be employed anymore. When Social Security runs out of money, Il'l start worrying about it because Il'l have plenty of company then!

[ubuibiok]

There is over 60 Trillion...not Billion, Trillion in Bad CDS paper out there. Thats why people like me have been screaming at the corrupt, stupid government elected beauty queens to stop paying to keep their friends business out of Bankruptcy court.

All the TARP was and is doing is keeping the same greedy people in charge of the big banks and corporations so that they can keep their paychecks and pass out Pink slips in a prolonged, drown out ,slow death as they look for a chance to jump ships.

[ubuibiok]

It was the CDS and overvalued property that was used as collateral that killed them....

Bosses rewarded Book value leveraged earnings so if you were able to loan out money loaned to your book assets why not keep build on them, in effect loaning out the same dollar to 10, 20 or more different times.

Thats where AIG came into the picture, they insured (for a small fee) the loans....and of coarse the were using "Bad" book values as well to show as collateral to back up their policies.