It’s Monday, let’s set the stage for the nationalization of more banks! – Updated

President Obama will be giving ANOTHER speech today. He loves the cameras and the sound of his own voice more than Chuck Schumer. The topic will be the economy and a big push for an overhaul of banking regulations.

Larry Summers, the former Treasury Secretary who is now the US President’s top economic aide, said that the reforms to be proposed will include the need to regulate institutions which have become so large that their collapse might threaten systemic stability.

Sounds reasonable, you’re probably thinking. But things are never as they appear and they’re never as Dear Leader says they are. [To keep things pithy I'll leave out the part about regulating salaries.] The big question is how are they going to decide which institutions are too big to fail, and how will they define systemic risk. According to The Wall Street Journal, neither question has been answered.

With Congress back in session and the anniversary of the Lehman Brothers failure upon us, the Obama Administration is resuming its quest for greatly expanded authority to bail out American businesses. Under the Treasury reform blueprint, any financial company, whether a regulated bank or not, could be rescued or seized by the Federal Deposit Insurance Corporation if regulators believe it poses a systemic risk.

If recent history is any guide, when the feds stage their next intervention, they will not define “systemic risk” and they will refuse to release the data underlying their decision. …

Is it just me, or does this reek of Obama setting the stage for nationalizing more banks?

Update: And why did he give the speech in the middle of the day? Do you think the market’s going to tank?