Even with the new bank bailout, Nouriel Roubini still thinks bank nationalization is the inevitable and proper course of action.
This is coming from someone who actually likes the Geithner plan.
Bloomberg: Roubini, 50, echoed criticism from Nobel laureate Paul Krugman that the proposal will not be enough for those banks that are insolvent and predicted that ultimately the government will have to take over more of them. He didn’t name which companies he thought would need to be rescued.
“Some banks are going to have to be nationalized and for them the plan doesn’t apply,” Roubini said in an interview with Bloomberg Television in London today.
A lot of folks are coming to the same conclusion after doing the back-of-the-napkin maths. As we noted yesterday, one problem with the new bailout is that it may make some banks provably insolvent, once it becomes obvious for all to see where the proper marks are. And when you consider where banks are currently holding assets, this seems inevitable.