US banking shares hit their lowest level since 1992 on Thursday as fears mounted that the government would be forced to nationalise a key institution.
Further heavy selling of key names ”“ Bank of America and Citigroup were once again among the worst performing, down 14 per cent to $3.93 and 13.8 per cent to $2.51, respectively ”“ helped push the Dow Jones Industrial Average to its lowest level in six years.
Shares in several regional banks also sustained heavy losses as the S&P financial index dropped 5.2 per cent to its lowest level since 1995.
“Every time someone mentions the word [nationalisation] then investors shiver ”“ and with good reason,” said Marc Pado, chief market strategist at Cantor Fitzgerald. “There’s a lot of angst over what [US Treasury Secretary] Geithner’s going to propose.”
I have been holding on to about $10K waiting to invest since last October. I don’t know what to invest in. I don’t trust the books of anyone anymore. I have my retirement in US treasuries, waiting out the storm. I have zero confidence in any stock or bond. I almost…almost bought BAC at $10. If I had, I would have lost about half my investment. I am really looking at real gold. This orgy of printing money has got to lead to massive inflation. Some signs of inflation are already creeping in amidst the recession. http://finance.yahoo.com/news/Wholesale-inflation-takes-apf-14410311.html
Stagflation again.
By all means, nationalize the banks. After all, look at how well Congress is managing the national purse.
#1 – one of the things the fed should probably do is try for targeted inflation. There will be some.
Sweden was successful in nationalizing the banks. They restored their economy to health within a decade. Then they were denationalized. Its the consequence of our government guaranteeing deposits.
We may have to get rid of a few banks – especially the new ones that came in looking for that “free money” that now seems to be avoiding them.
JW, as Mr. Obama said today, we can’t really consider Sweden’s foray into banking to be a worthy model for our circumstance. He said there were about five banks nationalized in Sweden – the actual number was in the 40’s. But whether 5 or 40, Sweden offers no comparison for the thousands of many varied banks here.
As for targeted inflation, I assume you mean control of the money supply in the fine fashion the FED has so wonderfully achieved under a string of ‘best and brightest’ economic super stars? If government is the answer, it must be a pretty stupid question.