More from Dr Setser:
It increasingly looks like the US is inching toward severely diluting the common equity of a set of banks where sovereign funds have substantial stakes, if not wiping out the existing equity entirely. That potentially — as Larry Summers warned in a former life — is a foreign policy issue. Summers pondered this topic at last years Davos session on sovereign funds:
[Suppose] the SWF of country A makes an investment in a major bank in country B. The bank gets in big trouble. Is there any control in the world that can assert, that with billions of dollars on the line, their head of state and foreign minister are not going to get involved in the negotiations?
Me, Keating, here now: So, as we lead the world towards economic collapse, we're actively going out of our way bite the hands that feed us...
Tell me why this makes any sense whatsoever
What does make sense is to nationalize all US banks with assets over $5Billion ASAP, sort out the mess and the lies, fire most of 'management' at most large banks, and then perform the necessary triage (eg let Citi and BoA die).
No one is too big to fail.
Except the US. But if we do not deal with reality sooner rather than later, look out below
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