Talking with some folks today about nationalization. Ever read about Hal Moore in the IaDrang Valley........"Broken Arrow". An American unit is being overrun. Sometimes, you just need to pony up and say, 'that's it." It may be time to say "nationalization". Leave a few solid banks, wipe out the equity, and get on with it. Get somebody in there to run these things correctly. But, there is a huge backlash waiting.
On the sell side, brokers use fixed income as "safe " investments. Go look up the holdings of the common on BAC, C, etc. Huge positions in the money centers. but, the preferreds..... they pepper all thes retirement, retail, pension accounts with preferreds. The govt pfd position, as I understand it, is above the previous issued issues. So, you wipe out the common, the pfd's, and most of the retired/about to be retired population. Oh, don't forget the "Wealth Management Brokers" and the firms. Lawsuits will be coming out the wazoo. And int the brokerage industry, they don't believe in E & O insurance. Most insurance companies make you buy it for their products. It pays in all cases except fraud. But the brokers don't have it. They 've already paid billions for Auction Rates, what will they do when the 'safe' stuff is gone, and they get sued for that. Not enough money in the world.
The more you look, the more you see, there is no way out of this without a horrible amount of pain. I think if you watch the politicians really closely, study the body language, they are scared shitless........of you and me. They know what they did, they know they really can't stop it, and they are just drawing it out. It's going to be horrible. Calpers is already out 185 billion:
http://www.sacbee.com/business/story/1515220.html
so, when do they say "you can't retire", or "you can retire on half benefits".? When it's everybody, how do we bail "everybody" out?
I don't know either.
