No Re-capitalization without Representation!

This financial crisis is like a barbaric massage with no happy ending.

If politicians were capable of putting aside special interests for one moment there is a blueprint out there to solve this banking crisis.

In 1992 it seems the Swedish had a little real-estate bubble of their own and they faced the crisis of an insolvent banking system. Short-sighted banking regulations and policies lead to rampant uncontrolled if not cancerous banking lending practices. This sound familiar?

The Swedish government didn’t rush to hand out vast quantities of cash under the table with nothing in writing and nada to show for it.

Imagine for a moment if I walked into my bank and told them I’d made some foolish investments and lost all my money. My bank would go through the motions of helping me and if I had enough assets they’d figure a way to bail me out while lining their own pockets. If I didn’t have the assets they’d foreclose my ass.

Mister Banker says, “Sure, Alan, you can stay in your house. We’ll make this all work out for you. It just so happens we have a special program for snooks, I mean clients, like you. We’ll just adjust your mortgage so that you’ll have to pay for a longer period of time and ultimately lots more of your hard-earned dollars. We can make you a slave to this bank; just sign your rights away on this dotted line. Here, accept this free ink pen.”
Notice the documentation.

Sweden determined that it was the banks that had the crisis. To prevent a total collapse the government announced it would protect all bank deposits and bank creditors of the nations 114 banks. This move bought them time.

Their next goal was to promptly wipe the slate clean.

The government forced the banks to write down all their losses before they came to the government for recapitalization.

In return for fresh money the government had the banks issues warrants. This forced the banks to be responsible for their losses. It gave the government ownership.

Our policy of reveal a little here, reveal a little there just doesn’t cut it because you wind up pouring good money after bad down rat hole after rat hole.

The Swedish government formed two new agencies. The first was to supervise the recapitalization of the banks; the second was to sell off the assets the banks held as collateral.

When the markets stabilized Sweden and its taxpayers then reaped the benefits by taking the banks public.

The result was it cost Swedish taxpayers less than 2% of GDP. We’ve already got 5% of GDP on the line.

Banks have the crisis.

If banks had gone to the government before they started this mass foreclosure mess I’d had more sympathy. If there had been no mass foreclosures we would not be in this pickle. You can’t foreclose on taxpayers and then have the government bail you out. Talk about a double screw job.

The taxpayers cry must be No Re-capitalization without Representation! Our cry must be No Re-capitalization without Representation!
No Re-capitalization without Representation!
No Re-capitalization without Representation!
No Re-capitalization without Representation!
No Re-capitalization without Representation!

And another thing - No Re-capitalization without Representation!