Posted on 10/09/2008 8:30:34 AM PDT by rabscuttle385
WASHINGTONThe Treasury Department is considering ways to inject capital directly into banks, possibly by taking equity stakes, as the financial crisis continues to worsen.
Treasury Secretary Henry Paulson, in a marked shift in rhetoric, played up Treasury's newfound authority to "to inject capital into financial institutions" in remarks Wednesday. Mr. Paulson, who won approval from Congress to buy $700 billion worth of distressed assets, had previously focused on Treasury's plan to buy mortgage-related securities from financial institutions that are having trouble getting the assets off their books.
As the financial crisis continues to escalate, Treasury has begun fleshing out ways to use its authority to make direct injections into financial institutions, according to a person familiar with the matter. Treasury is figuring out how to structure such infusions so that banks can recapitalize and begin lending.
No such moves are imminent, but the fact that the department is engaging in such discussions is an indication of how the crisis is constantly morphing. Such a move was not under consideration just a few days ago but has become more of a possibility in recent days as the stock market has plunged and the credit crunch shows no signs of easing.
Treasury wants to design something voluntary that encourages healthy institutions to participate. Treasury is discussing whether to buy preferred stock or find some other way to inject capital into the firms.
(Excerpt) Read more at online.wsj.com ...
I don't recall McCain objecting to this. Without McCain, of course, the bailout would have never been approved.
If you recall, sweeteners were put in for both the left and right to get them to vote for it.
This was one of the sweeteners for the left.
I agree but that doesn’t detract in the least from his key role in making the whole thing possible.
I disagree. This plan amounts to bailing out shareholders who would otherwise get wiped out in a bankruptcy. That's very socialistic in my book.
What we need is not a bailout, but an emergency, accelerated industry-wide Chapter 13 for all undercapitalized banks.
Just say no to bailouts!
Why not?
It worked so well for the railroads.
(That’s why we have so many cars.)
Which is why the plan sucks. Shareholders get to keep all the profit if things go well, but when things turn sour the government bails them out. This is worse than socialism.
We don't need no stinking bailout. We need a quick, efficient industry-wide bankruptcy that will wipe out the shareholders and allow recapitalized institutions emerge from the process as quickly as possible.
My comment had nothing to do with McCain; rather I was speaking of the warrant program and the MSM's usual diabolical tactics in twisting truth.
You idiot...buying stocks is not a bailout...it is to help the American people who own stocks in their companies, and whose 401k will save them in their old age. It is to help America provide more jobs, it is to get people off of unemployment and back to work. It is capitalism...sheesh.
It is not about Stockholders, it is about real AMERICANS who have an investment in this country, and are hurting..IT’S ABOUT MAIN STREET BUZZHEAD!
I'm rubber, you're glue...
buying stocks is not a bailout...it is to help the American people who own stocks in their companies,
The government is buying preferred equity in companies that are unable to raise capital in the private market. In other words, it's buying overpriced securities to help existing shareholders. That's a textbook example of a bailout.
It is capitalism...sheesh.
Actually, government ownership of equity is the very definition of socialism.
Protect depositors and let “interest only” types banks go under. Paulson’s a democrat - he might want to bail these folks out, but it’s better to let bad banks go under...
If we save them they’ll have more money to give to Barney Frank - let them go under. Next time they won’t be making “interest only” loans and giving kickbacks to Fannie and
Freddie.
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