T Nation

Good News about the Bailout


I hate the bailout package. I'm of the opinion that these companies all should be allowed to fail regardless of the impact on the economy and the markets. I guess you would say I believe in survival of the fittest for businesses and corporations.

Today I was listening to a public radio show called This American Life and I heard something I do like about the bill that was passed. When Paulson and his cronies were initially considering their options for handling the crisis a better one was presented than to purchase the "toxic assets"

The better option was a Stock Infusion deal, where instead of buying the assets, the government would be buying stock in the companies. This would give the government (and us the tax payers) a much better chance of recouping our losses.

The idea was rejected due to pressure from the bank lobbyest (banks hate the idea of Uncle Sam getting in their business and having a say in what goes on). It was also opposed by conservative Republicans who hate any thing that resembles Socialism.

So, the 700 billion rescue bill goes to the house and gets shot down. In the aftermath, when they were scrambling to get it approved, they were basically passing the bill around the table giving everyone a chance to add their own little special interest piece (read "pork barrel") so they would be willing to vote it in.

Someone, it's not known who, slipped in a provision that will allow them to use the "stock infusion" option if they choose to do so.

I'm hoping the news of this better option will spread and enough public pressure will come down on the politicians that they will have to use it. I'd much rather be an owner of these banks than be an owner of something called a toxic asset. I'd also really like to know who the sneaky sob is who slipped it in so i can give them a hug if i ever meet them.


I just saw the press conference with Hank Paulson just now. I really don't know what to say about this, whether or not it is a good idea.

Not sure exactly how this would help, they already threw a trillion dollars at this thing, that didn't work.


you won't solve this problem by throwing money at it, regardless of what form that money/funding/capital/whatever comes to the banks


THEY won't solve it period.

I predict the next 10-20 years will see the United States of America either begin to return it's roots and elect politicians that will mind their own business (if there even are any left) or we will reach the point of no return and begin the final slide into a marxist style fascism.

Our government allegedly "of the people, for the people, by the people" is in a mad scramble to subvert the national economy, the very tool by which dictatorships are forged in case anybody hasn't noticed.

The very worst thing that could happen to this country would be for there to be any sign whatsoever that this power grab is working. That will simply cement it in the minds of the cowardly weaklings now populating this land that government is THE answer.



Not trying to be a dick here on this one, but this could not be further from the truth. The one thing that needs to be thrown at this is money. Actually all that needs to happen is to let the world know that no matter what, you're going to throw more money at it.

The smartest investors in the world invest only when they can throw enough money at a deal that they buy themselves out of it if it goes bad. Most of Warren Buffet's investments become self-fulfilling prophecies because of this.

Don't give someone a million if you're not prepared to give him ten right behind that to buy the competition out if need be. And if that doesn't work, then replace him, step in and run it yourself and buy all the suppliers to vertically integrate and create cost efficiencies.

Capital allows you to create your own success if you act like a big fish in a very small pond. We could be acting like a giant fucking whale in a puddle if we really wanted to and this entire thing would be over.