Wotka World Wide

Thursday, February 19, 2009

You know the major banks in the United States are in trouble when Republicans are talking about nationalizing some of them like it is a foregone conclusion:

“If necessary you temporarily nationalize some of these institutions,” said a former senior Republican policymaker. “There has been a lot of pussyfooting around because we don’t like the word – which strikes me as utter nonsense.”

The time for biting the bullet may be fast approaching. In early April, big institutions publish their first-quarter results. If Treasury stress tests have not yet revealed the true state of their balance sheets, first-quarter results might do so.

“The first week in April – that’s when the children’s party is over,” says Chris Whalen, co-founder of Institutional Risk Analytics. “That is when the obvious will become apparent.”

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