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Lorr47 -> RE: White House Overhauling Rescue Plan (10/12/2008 2:21:52 PM)
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"Two weeks after persuading Congress to let it spend $700 billion to buy distressed securities tied to mortgages, the Bush administration has put that idea aside in favor of a new approach that would have the government inject capital directly into the nation’s banks — in effect, partially nationalizing the industry. As recently as Sept. 23, senior officials had publicly derided proposals by Democrats to have the government take ownership stakes in banks. The Treasury Department’s surprising turnaround on the issue of buying stock in banks, which has now become its primary focus, has raised questions about whether the administration squandered valuable time in trying to sell Congress on a plan that officials had failed to think through in advance. It has also raised questions about whether the administration’s deep philosophical aversion to government ownership in private companies hindered its ability to look at all options for stabilizing the markets.Some experts also contend that Treasury’s decision last month to not use taxpayer money to save Lehman Brothers worsened the panic that quickly metastasized into an international crisis. " New York Times
Now, let's see. When this mess started Warren Buffet and Mort Zuckerman started loaning billions for a 10% return secured by preferred stock. (eq to Goldman Sacks) As the government mental midgets played with themselves, many suggested that the government merely xerox the instruments used by Buffet and Zuckerman and use the xeroxes as templates for loans to others. But no, the government was too busy trying to find a way to pay top dollar for worthless derivatives and make sure taxpayer's money was unsecured with no return in sight. Now, the fog has lifted and we are back at square one? If it was good enough for Buffet and Zuckerman, why pray tell wasn't it good enough for the taxpayers about a month ago.
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