JP Morgan Troubles ~ Obama Economic Speech June 14th ~ Global Elite (including Alan Greenspan) Ends Conference June 14th...

June 14th .. Link .. President Obama Economic Speech Thursday, June 14, 2012

June 11-14 .. Link *Alert ~ The Global Elite Gather in Montreal June 11th through June 14th, 2012 (Alan Greenspan, former chairman of the U.S. Federal Reserve, and the governors of the central banks of Portugal, Spain, France, Brazil, Mexico and Canada are among the 150 world-renowned speakers)

Link .. *Jamie Dimon: From Wall Street’s whipping boy to the GOP’s golden boy

Remember? ... Link .. Nationalization? Greenspan Suggests Bank Nationalization Feb. 2009

Link .. "Resurrect the Resolution Trust Corporation" Resolution Trust Corporation - What is the RTC ...?

Link .. *** Links - Banking Reform ... Plan Moving Forward ...

Link .. *Excerpts: Survival Manual ... Nationalizing Banks

Snip .. _"Ideally, the government would have one or more potential CEO’s “on call” as a nationalization approached. The ability to announce a strong new CEO at the same time as the nationalization would considerably alleviate fears of chaos at the nationalized bank(s) and of immediate politicization. The strength of the CEO would go a long way towards indicating the government’s intention of being an active investor, but not the direct manager of the bank. Take the case of Jamie Dimon, the CEO of J.P. Morgan Chase, whose already strong reputation rose considerably over the course of the crisis. He has been open in admitting that Morgan’s relative performance was so good, not because it performed well, but because it performed less badly than its key competitors' "

And _Excerpts from ~ Bank Nationalization: A Survival Manual - Douglas J. Elliott – Brookings Institute

Putting the full weight of the government behind the actions. This will be a momentous step if it is taken. The success of the seizures may well determine whether the recession ends soon or turns into a true nightmare that will be remembered for decades.

The beginning would be one of the most dangerous and promising moments.

The President will need to be front and center in explaining and supporting the action, while the appropriate regulators and Treasury officials each play their proper roles. Ideally, key Congressional leaders would quickly show their support.

There are many definitions of “nationalization.” Here it will refer to a federal takeover of a bank where the government takes full, or nearly full, ownership and chooses to actively play the role of controlling shareholder.

This paper is designed around 15 essential steps to minimize the damage to taxpayers and the country in the event of a nationalization. These are:

Step 1: Decide the criteria for nationalization, including the legal authority to use
Step 2: Determine which large banks meet these criteria
Step 3: Choose when to act
Step 4: Calculate the size of the hole to be filled and ensure funds are available
Step 5: Decide how to allocate the losses between taxpayers, shareholders, and creditors
Step 6: Design a preliminary exit strategy
Step 7: Create an ownership structure for the government’s stakes
Step 8: Line up a few key managers
Step 9a: Announce the nationalization(s)
Step 9b: Shore up confidence in the rest of the banks
Step 10: Create a sound financial base; institute a good bank/bad bank structure
Step 11: Make the necessary managerial changes
Step 12: Announce a new strategic plan
Step 13: Implement the new plan
Step 14: Sell the government’s stake over time
Other analysts think that nationalization is all but inevitable.

***"It's very hard when you get to this point not to do that," said Adam Posen, the deputy director of the Peterson Institute for International Economics, a free-market research center. Posen thinks that nationalization is losing its stigma, and he envisions scenarios in which the government could seize the nation's 50 largest banks.

Tomorrow's problems go far beyond housing.

"Another $7 trillion — including commercial real estate loans, consumer credit-card debt and high-yield bonds and leveraged loans — is at risk of losing much of its value," Roubini wrote. "Then there are trillions more in high-grade corporate bonds and loans and jumbo prime mortgages, whose worth will also drop precipitously as the recession deepens and more firms and households default on their loans and mortgages."

***The government will need to make its criteria clear to the financial markets in order to avoid undue panic among creditors and investors who own stakes in other banks that are not being taken over.

(See Step 9b for more.)
Dr. Nouriel Roubini would have produced enough additional losses to give serious weight to the argument for nationalizing a number of the major banks.

We will not know for some months which economists are correct, leaving us with a critical question. Should we start nationalizing when and if we discover there is a 30% chance it will prove necessary, a 50% chance, a 75% chance, or what level?

In addition to the overarching timing question just discussed, the government will also want to think through the exact timing of a seizure, which could be affected by other economic or political events, upcoming quarterly financial reports, etc

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