Bingo. I've been wondering why Hank Putin didn't start with this plan (other then he was letting his buddies gobble up the spoils).
Buffett has preferred shares in Goldman for $5 billion that pay him a dividend of $500 million / year and he can get an upside equity stake. This $5 billion in equity lets Goldman lend $50 billion. Buying toxic assets only allow them to loan on a 1 to 1 ratio, not a 10 to 1 ratio. But, the bailout still sucks!
I agree, buying securities makes no sense, doesn’t help the balance sheet and doesn’t unfreeze lending to the seller. But buying a few trillion in equity both public and private would bypass the whole banking mess and inject money into the economy where it is needed.