Via Atrios, here is the latest proposed ripoff of taxpayers for Citibank's benefit:

Citigroup (C) has proposed that the US taxpayer and other preferred shareholders convert up to $75 billion of preferred stock into common stock, thus bolstering the company's tangible equity and putting it in less desperate need of a complete takeover. And what will the US taxpayer get for this preferred stock conversion? 40% of the company for some of its $45 billion of preferred, say reports. The reports add that Citigroup's goal here is to keep the US's ownership under 50%, so this won't be a de facto nationalization.

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Krugman today:

Alan Greenspan, the former Federal Reserve chairman — and a staunch defender of free markets — actually said was, “It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring.” I agree.

The case for nationalization rests on three observations. First, some major banks are dangerously close to the edge — in fact, they would have failed already if investors didn’t expect the government to rescue them if necessary. Second, banks must be rescued. The collapse of Lehman Brothers almost destroyed the world financial system, and we can’t risk letting much bigger institutions like Citigroup or Bank of America implode. Third, while banks must be rescued, the U.S. government can’t afford, fiscally or politically, to bestow huge gifts on bank shareholders.

Who disagrees with this? Besides shareholders in the banks? What does Santelli think?

Speaking for me only

Jane Hamsher writes on Ryan Lizza's New Yorker piece on WH Chief of Staff Rahm Emanuel, where Emanuel defends himself from criticism of how the stimulus package was handled. Lizza quotes Emanuel:

“They have never worked the legislative process,” Emanuel said of critics like the Times columnist Paul Krugman, who argued that Obama’s concessions to Senate Republicans—in particular, the tax cuts, which will do little to stimulate the economy—produced a package that wasn’t large enough to respond to the magnitude of the recession. “How many bills has he passed?”

To me the obvious question is how many difficult bills did Emanuel pass before this one? I think the answer is none. Besides, I thought Emanuel had already admitted mistakes in the handling of the stimulus bill:

Via Digby, apparently George Soros does not think so:

Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis. Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union. . . . "We witnessed the collapse of the financial system," Soros said at a Columbia University dinner. "It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom."

It is a little late to be talking about institutions being "too big to fail." They already failed. Oh by the way, apparently Paul Volcker was equally gloomy:

A clownish CNBC "on-air personality" (I take the phrase from a Chicago Tribune article), Rick Santelli, acted a fool the other day, ranting against help to homeowners in distress (WH spokesman Robert Gibbs rightly dismssed Santelli as someone "who does not know what he is talking about." But today, the NYTimes has an editorial that touches the actual issue with a needle. The editorial asks:

If Chrysler is really on track for a turnaround and all it needs is some financing to get over a bad patch in sales and debt markets, why doesn’t Cerberus Capital Management, which owns 80 percent of the company, put up the money itself? Why should taxpayers have to take the risk? That’s what private equity funds like Cerberus are supposed to do. . . . It seems the secretive private-equity fund is willing to gamble on Chrysler’s survival with the taxpayer’s dime, but not its own.

(Emphasis supplied.) [More...]

I'm off to court and then the jail. In case our co-bloggers are also busy, here's an open thread for you.

In a post about shifting attitudes about pot legalization, Mark Kleiman asserts that legalization will lead to a substantial increase in the prevalence of cannabis-related drug abuse disorder: I'd regard an increase of only 50% as a pleasant surprise, and if I had to guess I'd guess at something like a doubling."

Mark is fond of arguing that legalization would result in increasing drug use but he rarely provides any evidence to support his assertions. [More...]

Binyam Mohamed will be flown to Great Britain today, his six year ordeal at Guantanamo and prisons in Morocco, Pakistan and Afghanistan finally over.

Mohamed, who left Ethiopia for Britain in 1994 and studied engineering in London, was arrested in Pakistan in 2002 and transferred to Guantanamo in 2004. He was accused by the U.S. of being an unlawful enemy combatant who conspired to commit acts of terrorism. U.S. prosecutors dropped the charges in October.

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The Supreme Court will be in session this week. Justice Ruth Ginsburg is expected to be present.

Scotus Blog has a summary of the week's cases.

The Oscars are beginning. Here's a thread for your reactions and comments. I won't be live-blogging, just updating periodically.

Update 6:40pm: Best opening in years...since Billy Crystal. Hugh Jackman is incredible. The audience agreed, a standing ovation. I'm totally impressed.

Update 6:50pm: These Oscars are not your father's Oldmosbile. The presentation of best supporting actress was so moving and personal, it was just beautiful to watch. Hollywood needs a recession more often, it's truly brought out their creative inspiration. And congrats to Penelope Cruz. As I said in the red carpet thread, I loved Vicki Christina Barelona, she was terrific (as was Javier Bardem and the other two women.) Further updates as warranted below.

The Red Carpet is open at the Oscars. I think Miley Cyrus was the first to arrive. The male announcer at E! loved her dress, I didn't, it was too costume-y. His female counterpart called it "bold" but didn't sound crazy about it.The ABC folks didn't like it either.

The LA Times is live-blogging. At past awards shows, they've gotten the best pix up the fastest, we'll see if that continues.

I don't think the actual show will be that exciting -- too many of the nominees, like Slumdog Millionaire, seem certain. And Hugh Jackman as host? [Update: He was great.] For me, the Red Carpet is the main event. I'll be updating with thoughts and photos, hope you will join in. [Updates Below]

Here's another open thread, have fun.

I'll be back in time for the Oscars.