Stop Me Before I Vote Again

It's a great irony, this notion of nationalization of the banks -- at least the version that guys like Greenstain call for.

They not only want as quick as possible a return to private hands, but they'd only euthanize the asshole Lilliputian common stockholders.

Like a chorus of Russian baritones they all bellow, "Save the bondholder class!"

As far as they're concerned Uncle Sugar can go ahead and nationalize the big banks -- so long as he don't touch a hair on the hairy ass of any "senior debt".

"Preserve it, cherish it, reward it -- at all costs, make senior debt feel loved," they cry -- and hey, don't you get why? Aren't they the spine of the global economy?

Horse feathers!

Here's the real skinny, mates, here's Owen's plan:

Recall the two-bank option? -- Take banks in trouble and turn 'em into a pair of good and bad daughter banks. Very Madame Moa-ish that -- very Red Guard -- recall the slogan, "one becomes two"?

I buy it. Let's do that. Lets split the bastards in two. But here's how:

If you peer into 'em you'll find.all these toxic banks have basically two types of liability on their balance sheet: two sets of obligations.

One is to the aforementioned bond holders of various ilks and seasons, and the other is to us -- the ignorant innocent depositors of America.

This centaur of finance comes from the merger of the commercial and investment banks, way way back in the Clinton restoration, when "two became one" -- a very reactionary idea, that.

Now, since the patent folly of it all is paramount in the people's mind, let's reverse that squalid incestuous buttfuck of a marriage. Let's take each toxic critter and hack out a good bank using the critter's deposits as sole liability and sole obligation. And let's couple those deposits with an equal portion of assets, to wit the soundest part of the bank's loan portfolio.

And then let's have Uncle Sap insure the deposits -- oops, that's already more or less done, eh?

Once that new good bank is up and running, Uncle Slambo, the hammer of rentiers -- well he oughta just flat out 100% nationalize it and all its kin.

Stack 'em in groups and let 'em compete with each other, like the GSEs Fanny and Freddie do, or almost do.

What about the bad banks? Ah. This part you're gonna really like.

Throw all the bondholders and stockholders and every one else left over with claims to wealth through theft, and stick 'em with the rest of the portfolio -- the nub ends of the sound loans and all the stinking pile of Wall Street piffle, and then shoot the whole misbegotten freak show back out onto the deep rolling seas and wide open ways of our planet's markets for privately held paper figments.