Saturday, February 21, 2009

Banks + Nationalization = ?

Banking Sector Reels on Talk Of Possible U.S. Takeover

Washington Post — The specter of bank nationalization is driving a historic fire sale of stocks including Citigroup and Bank of America, making it harder for those firms to survive and imperiling the efforts of the Obama administration to keep banks in private hands.
A burgeoning chorus of prominent economists and members of Congress has concluded that some banks lack the money to solve their own problems and charges that the government has not yet announced an effective plan to help and that time is running short.
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Mixed message on nationalized banks

Bloomberg News - Senate Banking Committee chairman Christopher Dodd said banks may have to be nationalized for "a short time" to help lenders survive the worst economic slump in 75 years.
"I don't welcome that at all, but I could see how it's possible it may happen," Dodd said yesterday in an interview to be aired this weekend
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Citi, B. of A. drop on nationalization concerns

Marketwatch -- Bank of America Corp. shares hit a record low and Citigroup Corp.'s stock slumped
to an 18-year low Friday on concern the two financial giants may be nationalized. Citigroup dropped 22% to $1.95, their lowest level since early 1991. Bank of America fell 3.6% to $3.79 and earlier changed hands at a lowest-ever $2.53, according to FactSet Research data.
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