In a script that might as well be out of the playbook of the Vladimir Lenin, the socialist founder of the Soviet Union, Barack Obama is creating an environment that brings the Financial industry to a point where full fledged nationalization is the only option.
Here is Lenin in his own words:
Only by nationalising the banks can the state put itself in a position to know where and how, whence and when, millions and billions of rubles flow. And only control over the banks, over the centre, over the pivot and chief mechanism of capitalist circulation, would make it possible to organise real and not fictitious control over all economic life, over the production and distribution of staple goods, and organise that “regulation of economic life” which otherwise is inevitably doomed to remain a ministerial phrase designed to fool the common people…
How does one deny nationalization as White House spokesman, Robert Gibbs is doing, when to all intents and purposes, all the major financial institutions are already nationalized, or is there any sane person who thinks that TARP I which was used on pretty much all the biggest institutions in the financial sector came without preconditions? Breitbart
“This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring that they are regulated sufficiently by this government,” White House press secretary Robert Gibbs said when asked about nationalizing the banks.
“That’s been our belief for quite some time, and we continue to have that,” Gibbs said.
The speculation about the two banks’ future continued to take a direct toll on the market.
Gibbs was pressed for more details on his answer—specifically whether Obama would not nationalize banks. He said it was hard for him to be any clearer.
When a reporter suggested Gibbs could do that by saying point bank that Obama would never nationalize banks, Gibbs would not make that statement, but emphasized: “I think I was very clear about the system that this country has and will continue to have.”
Comrade Obama
As all this was being said, Citigroup and Bank of America continued to lose value, while Gold prices do the exact opposite. FT
Citi fell 22.3 per cent to $1.95, bringing its losses this week to nearly 44 per cent and reducing its market value to $10.6bn. Bank of America fell another 3.6 per cent to $3.79, giving it a loss of 33.6 per cent this week. At one point BofA was down more than 35 per cent, before rallying on the White House statement. The S&P 500 closed 1.1 per cent lower.
Gold prices were pushed beyond $1,000 a troy ounce during the day. “It is all fear-driven of one kind or another,” said Jay Mueller, senior portfolio manager at Wells Capital Management.
Meanwhile, here is a chart showing the decline of the dow since Obama took over… Call me naive, but I can’t see any reason why the market should be so afraid of a sitting President if there was no reason to fear.
