As I've said, they current crop in Washington seems to be glued to their twitter accounts to see how their plans are received by the markets. I'm optimistic that President Obama will eventually get us pointed in the right direction but with a team of advisers from Goldman and Citibank it's hard to get objective advice. The current thinking coming from such great minds as N. Roubini (btw - if this guy was so smart he'd be running money making billions - instead he's an NYU professor, nuff said) is that we need to do a Swedish style of nationalization. Take them over, clean them up, break them up and sell them back to the private sector in a few years.
This is an overly simplistic view, but it is the current thinking. Well, via bloomberg tonight we here that "The government may end up holding as much as 40 percent of Citigroup’s common stock, the newspaper said, citing people familiar with the situation it didn’t identify."
Wow, this is a bad decision. We could own 100% of Citibank and if trends continue it's going to be worth zero. This is a classic example of throwing good money after bad.
Here's my plan - let these banks fail or succeed on their own. Let's take the billions we're going to throw away on Citibank and start a National Credit Union owned by the taxpayers. If you're taxpayer you'll get a card and become a member of the National Credit Union. We can't blame the banks for not lending if we are the bank (maybe this would convince some that the problem isn't just loan supply it's also loan demand).