LONDON (AP) -- Britain announced a second rescue plan for the country's ailing banks on Monday, hoping to thaw frozen lending by offering to insure banks against large-scale losses on bad assets they already hold. Stock investors, however, were spooked by fears that the second bank rescue plan in three months was a step toward full nationalization of one or more banks. Fears focused on the Royal Bank of Scotland, which disclosed that it is likely to report a record full-year loss -- its shares closed down 67 percent.I guess that since the first round of bailouts worked so well, they'll now try another. Typical. There's never enough money printing and spending for Keynesians. I'm sure there will be more, also to no avail. In America it's no better. Early on in the crisis, Bank of America, Wells Fargo and JP Morgan Chase were all actually on pretty sound financial footing. But thanks to mergers with unsound firms, much of it incentivised by the Feds, B of A is now on government dole as a result of losses incurred by Merrill Lynch and Countrywide, and Wells Fargo is looking green around the gills thanks to larger than expected losses in its purchase of Wachovia. Before too long, we may have no sound banks left. Better to let a few go under individually than let them take the whole ship down.
Monday, January 19, 2009
Bailouts Don't Work
British financial markets took it in the chin today: