U.S. Treasury Considers Buying Stakes in Banks [screwing the shareholders]

The Wall Street Journal ^ | 2008-10-09 | Deborah Solomon

[Captain Kirk]

The Dems are the ones who put it in the bailout bill as an option.

I don't recall McCain objecting to this. Without McCain, of course, the bailout would have never been approved.

[what's up]

McCain didn't comment on any specifics of the bill.

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.

[curiosity]

Actually, this is the opposite of shareholders getting screwed. This is an instance of the government bailing out shareholders who would otherwise get wiped out.

[Captain Kirk]

I agree but that doesn’t detract in the least from his key role in making the whole thing possible.

[curiosity]

.not a socialist answer

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.

[curiosity]

No. The free market solution is to send the undercaptitalized banks through an accelerated Chapter 13. Wipe out their shareholders and force their bondholders to convert debt to equity. This is a proven solution that has worked many, many times in the past.

Just say no to bailouts!

[<1/1,000,000th%]

Why not?

It worked so well for the railroads.

(That’s why we have so many cars.)

[curiosity]

Yep! and it doesn’t “screw the shareholders”...it saves them from certain bankruptcy..Fed’s trying to save some of them.....

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.

[what's up]

I'm not really sure how your point relates to my original statement.

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.

[af_vet_rr]

This is getting out of control.

Thank God we had a Republican Congress for most of this decade, along with a Republican President, right????

This is getting totally ridiculous. Bush's administration is going to destroy the economy if they keep reacting to the markets like this.

Trying to delay the inevitable is only going to make it a lot worse.

[Kackikat]

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!

[curiosity]

You idiot...

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.

[GOPJ]

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...

[GOPJ]

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.