Dodd Says 'Nationalization,' Markets Tank
Sen. Chris Dodd (D-Conn.), chairman of the Banking committee, offhandedly -- or maybe not -- said around 1 p.m. today that nationalization of some banks may be necessary "at least for a short time," which accelerated a fall in the markets today.
Nationalization -- or government control -- is the worst fear of every business, especially banks, and Wall Street acted accordingly: Although the markets had been down between 1 and 2 percent, in the moments following Dodd's remark, the S&P 500 briefly fell more than 3 percent.
Shares of Bank of America, Citigroup and Wells Fargo were down more than 25 percent.
The markets have recovered somewhat, partially because of CNBC's report that Treasury Secretary Tim Geithner will release new details of the bank rescue plan next week and partially because the White House downplayed the nationalization rumors. Nonetheless, the downward spike confirms the markets's jitters.
White House spokesman Robert Gibbs said today at his news briefing that the administration continues to "strongly believe that a privately held banking system is the correct way to go."
February 20, 2009; 2:52 PM ET
Categories: The Ticker | Tags: Bank of America, Citigroup, Dodd, Wells Fargo, banks
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