Bailout 2

A follow-up to this blog post.

So I have done a litte research (not much, I've got work to do), and come up with a bunch of articles and essays, the most interesting which was this very brief piece from Bloomberg.

It quotes CBN supremo Charles Soludo as saying Nigeria cannot afford a bank bailout or a stimulus. It goes without saying that we cannot afford a stimulus, but this leaves me wondering about NEXT's report that the CBN has in fact already done a bailout (particularly since we could definitely -- in theory anyway -- afford to come up with some sort of plan to deal with $10 billion in toxic assets).

By the way, as much as I keep mentioning our ability to deal with the problem, I want to repeat once more that I do not necessarily advocate (or oppose) using federal funds or reserves to do so. My view is that if the problem assets are in fact $10 billion or so as has been estimated (and by the way, they need to quantify this amount and be transparent about it .... it is not that bad), we should come up with a forthright way of dealing with it, instead of this smoke-and-mirrors shadowy situation where the stock market is falling, and the banks seem to have issues, but the key figures just fiddle about making assurances no one really believes.

A few analysts have a suggestion for dealing with the bad assets, as noted in this report by Punch. Read it for yourself, see what you think. It boils down to selling bad assets at a steep discount .... and some other stuff. Interesting point in the last paragraph, where the speaker noted that some of the biggest corporations with huge impact on the GDP are not in fact listed on the Nigerian Stock Exchange.