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as financial topics come up from time to time on the list - this seems to be worth some attention: http://www.nakedcapitalism.com/2008/03/covert-nationalization-of-banki ng.html to give it a short and very simplified summary: - Wide parts of the US-Banking system would approach bankruptcy. - The FED started to accept junk-paper (not tradable anymore, no adequate market pricing ) as collateral for new "credit". - As this "credit" is seriously meant to be repaid, we should regard the fed-money as equity. (This is the debatable core argument of Waldman - but if we accept it, it means - in his words "that the Fed has gotten into an entirely new line of business, and on a massive scale." ) - Here come some numbers: Overall equity of the US banking system is about 2 trillion. The Fed supplied 200B "credit". That is 10% !!! (just to compare: Souvereign Wealth Funds invested a mere 24B) - de facto FED has already covertly "nationalized" 10% of the banking system. A lot of questions arise from that situation: - what kind of "banks" does this create? What will be their business? - how does it touch the notion of "money" and "debt"? - How does this apply to the announced death of the consumer? I hesitate to post too lengthy on the topic. More might come up, if a discussion requires. all the best, Stefan # distributed via <nettime>: no commercial use without permission # <nettime> is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: http://mail.kein.org/mailman/listinfo/nettime-l # archive: http://www.nettime.org contact: nettime@kein.org