Bank of America, Citigroup To Become Nationalized, Mark Short Term Bottom In Markets...

Bank of America and Citigroup stock prices are clearly saying that the private sector refuses to support these 2 institutions which means that the public sector must support them all on their own if they want these 2 institutions to survive...which means both will likely be forced into some sort of nationalization once the Treasury wakes up to the reality that there are no other options. However, the fact that the Treasury continues to take some delayed route by throwing additional money to plug up holes that will likely still blow up in the future, will make the Treasury look incompetent and narrow-minded as they were unable or simply refused to accept the current reality, thereby costing taxpayers more money for absolutely no reason. This is where the lack of confidence in markets is coming, the Treasurys absolute inability to accept reality...like a pathetic loser unwilling to accept a loss and move on. Believe me the consequences of this type of action are far greater than simply accepting a "smaller" loss....they're simply trying to move toward some solution that probably has a 5% chance of creating a 50% loss rather than accepting a 75% loss now...the only problem is that the cost of moving toward that 5% chance of creating that "smaller" loss is so great that it makes absolutely no sense to even venture towards it. The only person who attempts to quantify such a venture is a man who refuses to accept that he has the capacity to make mistakes.

Rather than continue to throw money at banks in an effort to delay the inevitable, the government needs to nationalize both Bank of America and Citigroup as soon as possible. The government needs to wake up to the reality that the private sector refuses or is simply unable to support these 2 institutions. Notice how even with continuous insider buying of bank stocks (which are in my opinion being fully financed by the US government as an attempt to create an image of confidence), the stock prices continue to languish. This is because the market has already somewhat accepted the possibility of nationalization of these 2 banks (based on depressed stock prices). In fact I'll go out on a limb here and say that when Bank of America and Citigroup do in fact become nationalized, the market will actually rally creating a SHORT TERM bottom in markets equal to a 1000-1500 point short covering rally.