Marc Faber Governments are not good at running Banks and Businesses

Marc Faber interviewed by Tony Jones of Lateline ABC Australian Broadcasting Corporation
TONY JONES: "Some of those bubbles are collapsing, but let's look at the bailout package. In Britain, the Government is buying large holdings in some teetering banks, even a majority holding in the Bank of Scotland which is nationalization, because it will have a controlling interest. These are measures of last resort, the question is, will they work?"

MARC FABER: "Normally, governments are not very good at running banks or at running any businesses, especially not the British Government, as we know. We just have to look at public transportation. So I'm very skeptical that it will work very well and we also have to analyze the terms at which these banks are being taken over. Basically, the proper way to go about bailing out the banks is to let the shareholders lose everything at the same time, let the bondholders take a very significant cut and then the Government should come in, recapitalize the banks, nurture them to health and resell them. But to essentially bail out the banks and still let the shareholders get away with it is probably the wrong medicine. "