Tuesday, February 10, 2009

The Case for Nationalization?

The NY Times reports Geithner's plan prevailed. As Mish comments:

Notice how insane this is. The market cap of Citigroup(C), JP Morgan Chase(JPM), and Bank of America (BAC) combined is $158 billion, yet the program is going to provide an initial $250 billion to $500 billion (with more insanity coming) just to deal with "soured mortgage-related assets".

I'll add in Wells Fargo (WFC) to make his point even more clear. In addition, it is important to note that the equity only has this value based on the assumption they were going to be bailed out.