The former options trader and writer Nassim Taleb, wants US banks to be nationalised, treating them as utility companies. He wants any risktaking entities to be separated and run privately with a clear directive never to be bailed out. This to prevent any profits from being paid out as bonuses during good times only to be bailed out during crises.

Taleb? Who is he?

He posts on the forum occasionally.

QuoteOriginally posted by: VIGOTaleb? Who is he?His forum name is Kurtosis. He's also the author the books "Fooled by Randomness" and "The Black Swan" which delve into the various ways that people, banks, and politicians misunderstand the statistics of risk and thus produce local (or global) financial crises with depressing frequency.

QuoteOriginally posted by: DJAverageThe former options trader and writer Nassim Taleb, wants US banks to be nationalised, treating them as utility companies. He wants any risktaking entities to be separated and run privately with a clear directive never to be bailed out. This to prevent any profits from being paid out as bonuses during good times only to be bailed out during crises.I bete Soros shares this view too. I hope Geithner is listening....

QuoteOriginally posted by: FermionQuoteOriginally posted by: DJAverageThe former options trader and writer Nassim Taleb, wants US banks to be nationalised, treating them as utility companies. He wants any risktaking entities to be separated and run privately with a clear directive never to be bailed out. This to prevent any profits from being paid out as bonuses during good times only to be bailed out during crises.I bete Soros shares this view too. I hope Geithner is listening....The game changerQuote...What about credit default swaps? Here I take a more radical view than most people. The prevailing view is that they ought to be traded on regulated exchanges. I believe they are toxic and should be used only by prescription. They could be used to insure actual bonds but – in light of their asymmetric character – not to speculate against countries or companies....

QuoteOriginally posted by: MCarreiraQuoteOriginally posted by: FermionQuoteOriginally posted by: DJAverageThe former options trader and writer Nassim Taleb, wants US banks to be nationalised, treating them as utility companies. He wants any risktaking entities to be separated and run privately with a clear directive never to be bailed out. This to prevent any profits from being paid out as bonuses during good times only to be bailed out during crises.I bet Soros shares this view too. I hope Geithner is listening....The game changerThanks, Marcos, that was an excellent article by Soros!More later.....

QuoteOriginally posted by: MCarreiraI bete Soros shares this view too. I hope Geithner is listening....The game changerSoros has been chewing on this old stuff for ages. Didn't he predict the collapse of the world as we know it in 1998 (as a consequence of the Asian financial crisis)?It's deja vu all over again.

This is the same idea as the Glass-Steagall Act of 1933, which was repealed in 1999, unfortunately.

Teleb's idea that the "risk-taking" part of a bank be taken out and the "bank" function left to be nationalized and run as a utility is crazy.A bank's job is not to store your money in a big safe, it is to borrow and lend. Well.... lending is risky! Banks don't borrow (take deposits) and then only use them to buy gov't bonds... they lend to small business, big business, home buyers, college students, etc. That is risky. How do you separate that out?

i don't care who owns the bank as long as they overpay me more than i'm worth.

i case of one single state owned bank, the threat of corruption will rise extremly, and thus, is likely to result in more inefficient resource allocation. i think it is sufficient if fed adjust reserve ratios thoughtfully, and sec start to enforce existing laws.

QuoteOriginally posted by: HTFBTeleb's idea that the "risk-taking" part of a bank be taken out and the "bank" function left to be nationalized and run as a utility is crazy.A bank's job is not to store your money in a big safe, it is to borrow and lend. Well.... lending is risky! Banks don't borrow (take deposits) and then only use them to buy gov't bonds... they lend to small business, big business, home buyers, college students, etc. That is risky. How do you separate that out?Wise lending involves collateral. There's a big difference between collateralised lending to a business and highly risky speculating in financial markets in the manner that banks were doing and got caught with their pants down. The former qualifies as the arena for a utility; the latter does not.

well if the banks arent allowed prop books then there is no problem paying big base salaries and small bonuses as they wont be making much from mundane activities like ECM and DCM any time soon.

I would think that if they paid the same salary (which they should) then yes, I would work for a nationalized bank. Unfortunately there is blood in the air and chances are they are going to create a irrational $400k cap on all salary (the amount the president makes). I think Barney Frank tried to make all TARP banks do this, even the ones who didn't TARP money (don't quote me on this).I think from the interview yesterday, I understand that Taleb wants to nationalize and resold to private ownership as soon as possible. The government is just there to temporarily swallow the losses resulting from mark to market and make a couple of bucks in the process. I think this was done successfully somewhere in Europe.