I fear, however, that the alternative - adequate public sector recapitalisation - is also going to prove impossible. Provision of public money to banks is unacceptable to an increasingly enraged public, while government ownership of recapitalised banks is unacceptable to the still influential bankers. This seems to be an impasse. The one way out, on which the success of Monday's plan might be judged, is if the greater transparency offered by the new funds allowed the big banks to raise enough capital from private markets. If that were achieved on the requisite scale - and we are talking many hundreds of billions of dollars, if not trillions - the new scheme would be a huge success. But I do not believe that pricing legacy assets and loans, even if achieved, is going to be enough to secure this aim. In the context of a global slump, will investors be willing to put up the vast sums required by huge and complex financial institutions, with a proven record of mismanagement? Trust, once destroyed, cannot so swiftly return.

The conclusion, alas, is depressing. Nobody can be confident that the US yet has a workable solution to its banking disaster. On the contrary, with the public enraged, Congress on the war-path, the president timid and a policy that depends on the government's ability to pour public money into undercapitalised institutions, the US is at an impasse.

It is up to Barack Obama to find a way through. When he meets his group of 20 counterparts in London next week, he will be unable to state he has already done so. If this is not frightening, I do not know what is.

Also, this seems like a political headache in the making (from same op-ed):

If this scheme works, a number of the fund managers are going to make vast returns. I fear this is going to convince ordinary Americans that their government is a racket run for the benefit of Wall Street. Now imagine what happens if, after "stress tests" of the country's biggest banks are completed, the government concludes - surprise, surprise! - that it needs to provide more capital. How will it persuade Congress to pay up?

Geithner was asked about paying foreign counterparties on AIG CDS swaps 100% rather than asking for a reduction.  He replied that to do so would have sparked a move by foreign counterparties to reduce payments to American banks.  In my mind, his response illustrates two aspects that I have not seen discussed much:
(a) The problem of dealing with foreign entities in general - most discussion seems to take place in the context of US politics and impacts even though many of the stakeholders (in the broadest sense are foreign).  It's one thing to demand that American companies take "haircuts" on debts owed.  It's quite another thing to demand that foreign entities take "haircuts". (b) Reducing what counterparties receive on CDS (or any other debt obligation) is likely to exacerbate the counterparties' situation.  So AIG might benefit but Citibank suffers.  

How will this sit with those Americans who don't want other countries being able to dictate the rules of the road?

Apparently, Sen. B Sanders has put a hold on the nomination of Gary Gensler to head the Commodity Futures Trading Commission.

Sanders gets right to the point: "Mr. Gensler worked with Senator Phil Gramm and Alan Greenspan to exempt credit default swaps from regulation, which led to the collapse of A.I.G. and has resulted in the largest taxpayer bailout in U.S. history."

French employees of a US company have barricaded their boss in his office south of Paris as they demand better terms for workers facing redundancy.

Link

So Andrea Mitchell is in Mexico reporting about America's situation with drugs and immigration. Now I find out Hillary Clinton is there too. An interesting thing was broadcast by CNBC the MSBC associate, now, Ford is making those gas operated hybrids that AT&T is purchasing, well they are made in Mexico. Yikes what happened to Detroit? Where is the beef? Now I understand that thousands of weapon per day are moving across the boarder to Mexico. The news picture makes one think these weapons are automatic M16 types. Are they? That's terrible!!!

I am very familiar with the M16, the M50, the M60, M79 grenade launchers, Army 45, Claymore mines, and the good old hand grenades of course the spirit of the bayonet which is kill,  are basic to ground war fair mechanics, Vietnam taught me that lesson.

Bush's legacy seems to have dropped another bomb on America and Obama with 250 cities in America considered part of a Mexican drug network that could possible be on the brink anarchy. Where the hell was Chertoff, what was he doing all this time? I am out raged, were the hell was the media all these years, it takes time to build up a 250  city network, again what I hear on MSNBC is well ladies and gentlemen we will decode what the president is really saying reporting live form where ever.    

Please understand I feel to be expressive with some laughter and light humor talking about this stuff. But after reading about the failure of the Czech Republic government along with other countries makes me particularly uneasy. It is not too cool to see Mexican government fail. This whole thing is just incredible even thinking about the millions in Mexican aliens that are likely running for cover.