The bank stocks have rallied back supposedly on relief that the White House has taken nationalization off the table. Have they really? It looks like thin gruel to us.
AP: White House press secretary Robert Gibbs was asked Friday about speculation that the Obama administration may seek to nationalize two financial bellwethers, Citigroup Inc. and Bank of America Corp. Share values of both financial institutions have fallen again.
Gibbs responded that the administration continues to “strongly believe that a privately held banking system is the correct way to go.” Along with that, he said the government must ensure that banks are sufficiently regulated.
Said Gibbs: “That’s been our belief for quite some time, and we continue to have that.”
That’s nothing. Of course the administration believes that a private banking system is a good idea. But he didn’t say anything about specific companies at this moment, and whether a temporary pre-privatization makes sense.