It would have to be cheaper - and more productive - to declare a bank holiday a la FDR, actually audit all the bank books, and stop pretending that some banks aren't completely worthless. This dog and pony show is meant to inspire consumer "confidence" but other banks know exactly what's going on and refuse to trust other lenders. Why should they? Time to bite the bullet and let the weak ones fall:
WASHINGTON — The U.S. government early Friday morning agreed to invest $20 billion in Bank of America, and to protect the bank against up to $118 billion in potential losses from bank assets related to risky mortgage loans.
Early Friday morning, Bank of America reported a $2.39 billion fourth-quarter loss and slashed its quarterly dividend to a penny. Meanwhile, Merrill Lynch posted a $15.31 billion loss for the period. The company reported a profit of $4 billion for the year.
"Last quarter we said that market turbulence, economic uncertainty, and rising unemployment would take its toll on quarterly earnings, and that has certainly been the result for the fourth quarter," Chief Executive Ken Lewis said during a conference call with investors Friday.
"Congress has passed a financial stabilization plan as well as other programs put in place, starting to stabilize the market and promote liquidity, but at a pace slower than any of us would like," he added.