Charlie Rose interviews Fred Mishkin, Nouriel Roubini, et al.
This is a concise — but informed — discussion of where we are, and where we need to go as far as the current American banking and financial crisis. The interview by Charlie Rose of Fred Mishkin (Columbia University), Nouriel Roubini (NYU), Mark Zandi (Moody’s) and others gives an exceptionally clear perspective on the implications of ‘Nationalization’ — the equivalent of putting functionally insolvent large U.S. banks and financial institutions into receivership without having to pump additional taxpayer dollars into keeping “zombie” banks alive like Japan did during their “lost decade.” The question of functional insolvency, coincidentally, is the purpose of the Treasury Department’s “stress testing” of the capital ratio and balance sheets of these institutions. To make the “stress testing” hurdle by the Treasury Department, U.S. financial institutions are now resortng to accounting tricks by calling for the temporary halting of ‘mark to market’ in order to artificially inflate the value of their assets based on a speculated future value, as opposed to using actual current Market value. Wall Street argues that current value is not an accurate reflection of value. If that is conceded, then neither would future value assessments be any more accurate, in my view.