Thread: Soros: U.S. Banks Need $1.5 Trillion Now

Soros: U.S. Banks Need $1.5 Trillion Now

Wednesday, January 28, 2009 12:43 PM

The United States needs to recapitalize its banks but should consider the creation of a "good bank" when considering how to deal with the toxic assets, hedge fund manager George Soros said on Wednesday.

Speaking to Reuters Television at the World Economic Forum in Davos, Soros said the planned U.S. fiscal stimulus and proposals for creating a "bad bank" to pool banks' bad loans and assets may help ease the economic crisis stateside.

But he said these were "only palliatives."

"They need a thorough reorganization of the mortgage system and you have replenish the equity of the banks," Soros told Reuters. "That now would require an injection of about a trillion and half dollars -- much more than if they had done it previously under the TARP (the $700 billion Troubled Asset Relief Program agreed by Congress last year)."

Soros added: "The well has been poisoned by the way the TARP money was used.

"It needs a good bank/bad bank solution, but I would do it differently than what is proposed," the Hungarian-born speculator-turned philanthropist said.

"I would keep the capital of the banks together with the bad assets in the bad bank and then create a new bank with the good assets of the bank and the recapitalize that, giving the shareholders the right to put in more money," he said.

"Without this the banks will not lend, because they know there is a lot of deterioration coming."

Earlier Soros told a press lunch that the "financial structure we used to take for granted has collapsed" and everyone was in a "state of shock" as the financial storm spread internationally and into the real economy.

He said the bankruptcy of Lehman Brothers investment bank last September was a "watershed event" and the financial system was now on "artificial life support."

http://money.newsmax.com/streettalk/geo ... ode=78F7-1

Pretty soon the only ones left to tax will be the rich like Soros. Dig deep boy, dig real deep. Oh wait, he likes illegal aliens - maybe they'll save the economy no?

Soros helped to create this breakdown, by funding open borders groups who demanded home loans for "minorities", he then made tons of money trading the derivatives based on these subprime loans. Yes the banks need to be recapitalized, using all the money he and other billionaires made from this scheme!! The Government needs to size their assets, that should be their stimulus bill!!! I think the Republicans should file their own stimulus bill which does this.