Paulson: U.S. Will Invest in Banks

UPDATED at 7:35 p.m.

In remarks to the media just concluded, Treasury Secretary Hank Paulson said the federal government will use the authority it has been granted by the $700 billion Wall Street bailout/rescue law to buy actual stakes in U.S. banks, in addition to merely buying troubled assets off their books.

The move is notable because it will give the federal government and, by extension, U.S. taxpayers, an actual ownership position in banks, effectively nationalizing them to a degree.

Under the original bailout/rescue plan, taxpayers would be only temporary owners of the troubled assets, which will be sold back into the private sector. And, indeed, the newly announced ownership stake may be temporary, as well.

"We can use taxpayer money more effectively, more efficiently, it will go farther, they will get more for their dollars and more protection if we develop a standardized program" for buying equity stakes, Paulson said.

Paulson was asked if Treasury will spend more money buying the troubled assets or buying equity stakes.

"I'm not willing to say anything today relative to the size of the two efforts," he said.

Paulson would not commit to government backing of interbank lending -- probably the biggest thing gumming up the credit flow is the fact that banks aren't loaning money to each other because they don't trust that they'll get it back.

But the secretary acknowledged that the credit market -- measured by spreads -- is still frozen, despite the coordinated rate cut announced by several countries earlier this week.

"I look at the same spreads you do," he said. "I see the same things you do. There's more to do in the liquidity area."

But Paulson added: "Remember: the program announced by the Fed has not been implemented yet."

Paulson said the G-7 statement issued following the meeting is less rambling than past statements. "We said, 'Let's have something that's different, that's to the point and that's powerful.' "

When asked how quickly the various rescue plans can be implemented, Paulson said: "Trust me, we are not wasting time. People are working 'round the clock to deal with this."

Here is Paulson's statement.

-- Frank Ahrens.

October 10, 2008; 7:32 PM ET  | Category:  business
Previous: G-7: No Specifics for Global Credit Rescue | Next: Morning Briefing

Comments

Please email us to report offensive comments.



Now Paulson is holding a press conference saying the U.S. will buy stock in U.S. banks.

Great, here comes socialism. And I moved away from France to get away from this.

Posted by: Brian | October 10, 2008 6:55 PM

Socialism finally has come to the U.S. courtsey of the Bush Administration. I imagine that Osama Bin Laden is laughing his ass off at the stupidity of Bush and the U.S. Next step will be to legalize the U.S.Communist Party so we can call each other comrade!!

Posted by: Almost an ex-American | October 10, 2008 6:59 PM

STEP AWAY FROM MY WALLET, SOCIALIST REPUBLICAN PAULSON!

STEP AWAY!

What an idiot.

Posted by: Will in Seattle | October 10, 2008 7:04 PM

To the commenters above - you must have been hiding under a rock for the last several months. The decisions to do this have not been impulsive; in fact, they could have come sooner. As you have seen, letting the market regulate itself has led us to disaster. Rethink your narrow-minded, market-dominated capitalism. That experiment has failed, and miserably.

Neither is this socialism. Socialism protects the poor against the excesses of the rich. In this case, the the poor are paying for them.

Smart, the both of you.

Posted by: Better than what we had.. | October 10, 2008 7:08 PM

Did not Paulsen say that the position in bank stocks would be non-voting shares. That strikes me as dangerous and is a potential hand-out without control.

Posted by: scullynv | October 10, 2008 7:12 PM

Hey you guys objecting to investing directly in banks -- are you the same guys who supported investing the social security overall surplus in closely supervised but individual 401(k) accounts for all taxpayers? Since that's the account that keeps us from being any more than $12 trillion in the red right now, that's essentially what Paulson's investing in the banks. Seems like a much more efficient, lower cost system to invest directly than through 300 million individual 401(k) accounts.

Posted by: Bill in Portland | October 10, 2008 7:14 PM

This is a smart move by Paulson. He demonstrated a lot of restraint waiting until the markets closed in order to give investors something positive to consider when the markets open next week.

Posted by: Joseph | October 10, 2008 7:15 PM

This is, or should be, against the law. I don't mind if the Feds provide loans or guarantees but actually buying ownership - NEVER ! ! !

Posted by: Lionel Dyck | October 10, 2008 7:16 PM

ScullyNV -- the actual quote is: "Consistent with the legislation, any equity the government purchases through a broadly available equity program would be on a non-voting basis, except with respect to the market standard terms to protect our rights as investors." Sounds like voting to me -- that would be market standard. "Treat us like any other shareholder."

Posted by: Bill in Portland | October 10, 2008 7:18 PM

"I believe in the United States of America as a Government of the people by the people, for the people, whose just powers are derived from the consent of the governed; a democracy in a Republic; a sovereign Nation of many sovereign States; a perfect Union, one and inseparable; established upon those principls of freedom, equality, justice, and humanity for which American patriots sacrificed their lives and fortunes.

I therefore believe it is my duty to my Country to love it; to support its Constitution; to obey its laws; to respect its flag, and to defend it againest all enemies."

Now that the government is going to run the banks, The Post might as well be reinvented and we can just run the government with Post Revolution. A free press, your posts and ideas should get things started. It's not like We are going to defraud ourselves the way they have, landing one and all in a crisis they created but can't solve. We have the solution right here and it's a town hall that's always open. Even when you call your representatives, they are too busy with the crisis. Post Revolution is the solution.

Posted by: Post Revolution | October 10, 2008 7:25 PM

Henry Holcomb Bennett

Hats off! Along the street there comes A blare of bugles, a ruffle of drums, A flash of color beneath the sky: Hats off! The flag is passing by! Blue and crimson and white it shines, Over the steel-tipped, ordered lines. Hats off! The colors before us fly; But more than the flag is passing by. Sea-fights and land-fights, grim and great, Fought to make and to save the State: Weary marches and sinking ships; Cheers of victory on dying lips; Days of plenty and years of peace; March of a strong land's swift increase; Equal justice, right, and law, Stately honor and reverend awe; Sign of a nation, great and strong Toward her people from foreign wrong: Pride and glory and honor,--all Live in the colours to stand or fall. Hats off! Along the street ther comes A blare of bugles, a ruffle of drums; And loyal hearts are beating high: Hats off! The Flag is passing by!

Posted by: Post Revolution | October 10, 2008 7:29 PM

This plan is a heck of a lot better and smarter than buying a bunch of toxic junk no one wants to get close to, let alone buy. Finally, Paulson is beginning to think like a shrewd banker instead of a boring government stiff!

Posted by: AR | October 10, 2008 7:32 PM

To All you "socialism" doomcriers, the inconvenient fact of the matter is that the one and only Socialist in the US Senate voted AGAINST the bailout.

Posted by: Steven Porchst | October 10, 2008 7:34 PM

Finally. This is a far better plan than buying assets, and much quicker to implement. Also better for the taxpayer. They may still have to buy some really bad assets, but this is going to help a lot. First up will be Morgan Stanley--I bet this weekend.

Posted by: Andy | October 10, 2008 7:37 PM

Of course, the Republican nominee has been attacking the Democrat as a socialist while the administration forwards the most socialist policy ever implemented in the history of the United States.

Posted by: Kacoo | October 10, 2008 7:38 PM

People are thinking about it and the government is cutting back and the Post keeps expanding. Maybe the Post can buy GM and we can design a car that we actually want to buy at a price we can afford. Plant closings ahead at GM. Making cars is a lot like making newspapers. I'm for an aluminum car. Light, fast and good mileage. We could build the next DeLorean out of aluminum and get back to the future.

Posted by: Post Revolution | October 10, 2008 7:42 PM

Paulson the stooge should be hanged by the neck until dead. One scam piled on top of another. If I go to Vegas and lose my stake, nobody will bail me out!

Posted by: Bill | October 10, 2008 7:44 PM

Its the end of an era in US financial history.Capitalism has shown the free market just doesnt work for the majority of americans .The system has been perverted through the years (and political process) to mainly benefit the chosen few.Alas,the corrupt system is coming to an end,once and for all.Good riddence!

Posted by: Joe | October 10, 2008 7:49 PM

Bailing the banks won't help as people don't have jobs to get a loan. Main Street is what needs bailing. It is the only thing that will work.

Posted by: Maddogg | October 10, 2008 7:50 PM

I haven't seen this commented on, but isn't the primary difference here not about what the government owns but whether the government is adding to bank assets or bank capital?

As I understand it -- and this could be completely wrong -- by taking away a dollar of bad assets and replacing it with a dollar of government money, a bank will be able to loan out only one dollar more. On the other hand, every dollar added to bank capital can be added to bank reserves and thus allow the bank to loan around 8 dollars extra. Is this right?

If so, then it seems like this really is the way to go. Taxpayers will be getting a lot more for money in terms of added liquidity. Can anyone address this issue?

Posted by: JPS | October 10, 2008 7:51 PM

It's a question of how you invest in banks, and not whether you do.

In some ways, investing in banks corrects for an information assymetry that would come from investing in toxic assets directly. A bank would likely have more information about the value of troubled assets it is selling that would the government--there would, in fact, be an incentive to sell the most toxic, and hope for an overpayment.

Now, change the dynamic if the government in getting an ownership in the bank, with this twist. The bank offers toxic assets for a price, the government pays some money for them, and also receives an ownership share in the bank. Now, if the bank overvalues the assets, the government gets a bigger share of the bank. In effect, because this is a closed loop exchage--assets sales for money and stock--the government can share some of the upside, if there is any.

I sure hope these guys are thinking about mixed asset purchase and stock purchase and cash infusion options.

Finally, as a shareholder, the government should be on the audit committee, and should be free to give comments about compensation, particularly for bonuses.

Posted by: Bill | October 10, 2008 7:53 PM

Forget about it. They are going to be managing or mismanaging losses for the next 100 years at the new federal bankrupt government. It's slavery to debt and they can have it. Their goal is to get everybody bickering about it and worried. There's not a thing you can do about it. The assets are toxic, the debt is a time bomb and they have no idea what to do.

Post Revolution has no such limits.
Amendment XIII

Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

We can't be made slaves to their failed banks.

Posted by: Post Revolution | October 10, 2008 7:54 PM

If he wnats to do it right nationalize them. Halfway capitalism and halfway socialism will never work. He has his head up his as-.

Posted by: Old Coot | October 10, 2008 7:54 PM

So doesn't that mean the Government is going to end up giving preferential treatment to the banks that it buys into? If taxpayer money is tied to these bank's success then the Government will make sure they're successful even if that means giving them preferential financing or regulation.

Are Banks that don't have Government stakes going to be discrimated against? This could be really bad. The Government should not be deciding how capital is allocated in this country. Politicians are not competent to make these decisions. Political considerations should not play into banking and financing decisions. That's what got us into this mess. This crisis should have disproved the logic of GSE's and the CRA and other politically motivated forms fo meddling in the financial sector. This move will end up punishing the banks that did not make bad decisions or did not donate enough to the right politicians. This is horrible.

Are any of the Presidential Candidates against Socialism? Have either of them read Hayek or Friedman? I think I'm going to write in Capitalism. Neither of these fools is worth voting for.

Perhaps once the Republicans get crushed in this election they can return to their roots and rebuild their political brand the principles of limited government and free markets.

Posted by: Anonymous | October 10, 2008 7:55 PM

How is this not free market capitalism?

A wealthy investor is buying up stock in companies currently valued cheap with the expectation of a big return.

This is how it _should_ work.

Posted by: whatwhat | October 10, 2008 7:56 PM

All of this "socialist" activity has already been done before during the Great Depression when the gov't bought shares of banks then calmly returned the shares for a profit after the storm settled.

Will all of those who do not know any U.S. history please refrain from making any more asinine comments? We thank you for your cooperation....

Posted by: New Dealer | October 10, 2008 7:58 PM

BANKRUPTING THE GOVERNMENT

There is no faster way to bankrupt the government than to buy stocks WITHOUT OWNERSHIP. We have a top guy in the financial market who is an IDIOT. Does he really understand what he is doing? Shortsellers can swallow those billions in seconds. It's tantamount to money transfer from government to shortsellers for free.

SACK HANK PAULSON!!! THIS GUY IS TERRIBLE!!

At least the Brits were buying stock and OWN THE COMPANY. This person is an IDIOT!!

Posted by: spiderman2 | October 10, 2008 8:01 PM

"Halfway capitalism and halfway socialism will never work." What do you think we been living with for the past 75 years?

Anyway, I also find it funny that Paulson waits until 6pm on a Friday to release this little tidbit of information. Like the upcoming Palin troopergate report, timing is evrything...

Posted by: New Dealer | October 10, 2008 8:01 PM

"We can use taxpayer money more effectively, more efficiently, it will go farther, they will get more for their dollars and more protection if we develop a standardized program" for buying equity stakes, Paulson said.

Might as well just stop at, "We can use taxpayer". They're throwing the taxpayer to the wolves and the losses just keep multiplying and will keep multiplying. People don't trust in the bailout. It's more debt to solve the debt problem. It makes no sense. It's lunacy.

Posted by: Post Revolution | October 10, 2008 8:02 PM

So lets explain here, for the Bush cheerleaders and the neocon nazi's of the repub party.

The gov under Bush has caused the worst financial turmoil since the great depression.

The neocon nazi's now reward the worst offenders of our financial institutions with enormous riches courtesy of the bankrupted American tax payer.

The Bush neocon nazi's add insult to injury and blame the American individual investor who played by the rules, saved their money, worked hard, trusted the system and all the Bush neocon nazi's told them about the economy "The fundamentals of our economy are strong"

To further torture the American citizen, the Bush neocon repub / thug nazi's blame Obama and dems for the meltdown. Just like Hitler blamed the burning of the Reichstag which was the precursor
for WWII.

The neocon nazi's on Washington posts threads are easy to spot, even though they have multiple nics and change them often

Gary Gelormino Seven Hills Ohio 44131 (216)447-0081

Posted by: Gary Gelormino | October 10, 2008 8:10 PM

How hysterical would the wing nuts be if it was President Obama who did this rather than Bush?

Posted by: Carl | October 10, 2008 8:11 PM

Paulson plans on selling American children into a doomed future of debt and despair.

Posted by: Post Revolution | October 10, 2008 8:12 PM

McCain Obama, it makes no difference.

Posted by: Post Revolution | October 10, 2008 8:15 PM

I wish people would get over CEO compensation packages. If there was no government imposed cap on the base salary of CEOs then the bulk of their salaries would not be tied to stock options and there would not have been such a huge incentive for people like Ken Lay to manipulate earnings so they could get their full salary. If Tom Cruise can get paid $20 million to make a movie then why is it wrong for a CEO of a major corporation to receive $20 million in base salary for a years work? Why does the majority of their salary have to be paid in stock options? Why does the Government force these bad incentives into the marketplace?

If CEO pay was capped at Banks then banks would have a hard time attracting the best CEOs. Is the government going to force them to work? The Government should not be dictating pay terms. That is a restriction of freedom.

Posted by: Anonymous | October 10, 2008 8:20 PM

I am laughing my ass off at all those people complaining about socialism. It's Alan Greenspan and Phil Gramm you should be blaming for bringing us to these straits. In a democracy the government IS the people, so this is the people taking control of institutions that have failed to serve our interests. If you're so upset about not getting your way, take your toys and go home.

Posted by: eatbees | October 10, 2008 8:23 PM

The whole plan is to destroy freedom, making Americans second class citizens, with government controlling all finance and establishing a dictatorship run by Paulson and the former Wall Street executives. That's their plan.

Posted by: Post Revolution | October 10, 2008 8:25 PM

Take your losses and lose your homes. I never signed a mortgage. I was warned and I heeded.

Posted by: Post Revolution | October 10, 2008 8:27 PM

Bush & Co. continue in the tradition of Joseph Stalin.
And I hear the right complaining about Obama being a socialist while they support the Stalinist communist regime in Washington.
Talk about idiots.

Posted by: DWayne | October 10, 2008 8:29 PM

People will not be laughing by next week. It's going to get worse. It's a bloody mess and they were warned.

Posted by: Post Revolution | October 10, 2008 8:30 PM

..."I find it ironic that the republicans/party the very one's who believed in Capitalism are the VERY ONE'S WHO KILLED IT/FACT."

..."Now they want you/Joe/Me/taxpayer to foot the "RECORD/BILL/DEBT, 'that's $ A record folks $11 TRILLION with a "T" not a b.

While they hand you the BILL AND RUN....AWAY LAUGHING ALL THE WAY TO THE BANK...."ITS CRIMINAL WHAT REPUBLICANS RECORD SHOWS AND WHAT THEY'VE DONE/FACT!

..."I beleive the Country needs to put Democrats in charge of all three Branches of Government so we can get too the TRUTH!

Hold them accountable as we are held accountable!

Democrats folks would use the GOVERNMENT TO HELP THE MIDDLE CLASS/POOR, and of course "Democats would/FACT PUT ALOT OF REPUBLICANS IN JAIL!

....."You'd be there if you had..."MADE THIS CRISIS/DISASTEROUS/MESS/FACT/PERIOD!

...."The republicans record clearly shows they have BROKEN U.S. LAW AND INTERNATIONAL LAW/FACT!

....The republicans record of INJUSTICE has RUINED United States IMAGE/FACT.

Republicans including Phil Gram, Allen Greenspan/rest/republicans/lockstep/De-regulating the banks we see the "DISASTEROUS/RESULTS/RECORD/REPUBLICANS/MESS/CRIMINAL/FACT!

...."One More Fact too...

..."True Patriotism, "Hates Injustice In Its Own Land, "MORE, "THAN ANYWHERE ELSE."
---Clarence Darrow

Posted by: Tommy Birchfield/Master's Program, ETSU/Voter/VET USAF | October 10, 2008 8:31 PM

Why is FDR considered to be a great President? HIs 3 terms as President were dominated by economic depression and war. Two of his signature policies, the NRA and the AAA, were found to be unconstitutional and arguably prolonged the Great Depression. His cabinet of supposedly brilliant advisers thought the best way to cure the downturn in economic growth was to reduce production. Think about that one....It's true. And he reversed policies on numerous occasions causing more uncertainty in a frazzled market. If this makes FDR great then by those standards Bush is great too. It's time to get over the New Deal nostalgia.

Posted by: Anonymous | October 10, 2008 8:36 PM

Capitalism will wipe socialism out. The Hugo Chavez vision will end in death and the market will just move on without remorse. Not anything can stop capital from seeking the highest yield. Who wants to work for less and see their investment yield less? You can argue for less and you will get less and less until you have none. You will then be all-gone. Capitalism will continue without you.

Posted by: Post Revolution | October 10, 2008 8:40 PM

I am not an economics major, nor have I even taken a course in the subject. Regardless, it's quite apparent that this country does need some sort of fix. I don't think it prudent to continue saying, "let the market work itself out". Let's not kid anyone, we are in a recession, free-falling into depression. People can't borrow from their banks, banks can't borrow for each other. Housing DRIVES our economy. How does anyone think an end is in sight, unless and until the housing crisis is solved. And I got bad news for all of you, foreclosure-land is here for a few more years. ARM loans and interest only loans were taken out in 2005 & 2006, and those junk loans will reset and go into default in 2008-2011. Buying up shares, rather than McCrazy's idea of buying up bad mortgage loans at FACE value, seems like the better idea, not necessily the one to save us. Look on the bright side, the US economy looks great compared to the failing economies of the world. Maybe, just maybe, the US will be the one strong enough to weather this storm. Good luck to all.

Posted by: DL | October 10, 2008 8:46 PM

Looks like a lot of people on here would rather see the Country's economy collapse conpletely. Wake up.

Posted by: leaand | October 10, 2008 8:51 PM

People can't repay their banks. Loans and credit will remain frozen, while assets will be liquidated and chaos will yield to order. Capitalism will continue to produce wealth. Socialism will produce poverty and despair. Quality pays for itself and rewards investment. Socialism leads toward dictatorships. Socialism is slavery to the state.

Posted by: Post Revolution | October 10, 2008 8:53 PM

Death is government. I'd be in jail in your socialist/communist countries for writing that. The Post would be in trouble to from the idiot government.

Good luck Post.

Posted by: Post Revolution | October 10, 2008 8:59 PM

This sounds like a horrible idea. If Paulson uses our money to buy junk mortgages, they are still always going to be worth something. If we buy stock in junk banks that go bankrupt, we lose everything.

This comes across as a Ponzi scheme where we give the banks money so they can loan out even more. Brilliant! We'll ignore the junk assets, and allow the banks to make things even worse.

I'm really tired of people looking for an immediate fix for this. It is going to take weeks for the markets to settle. AND YES, PEOPLE ARE GOING TO LOSE MONEY (probably all of us, in the short term). Paulson needs to do what he was tasked to do, not look for quick fixes to prop up the stock market.

Posted by: smc | October 10, 2008 9:14 PM

The US Government will do what Britain is doing with the Banking system.

Britain offered banks like Royal Bank of Scotland, Barclays and HSBC Holdings up to £50 billion, or $88 billion, to shore up their capital in exchange for preferred shares. It will also provide a guarantee of about £250 billion ($438 billion) to help banks refinance debt. The Bank of England will double the amount it lends to banks under its special liquidity plan to £200 billion.

Prime Minister Gordon Brown, whose political legacy is at stake, presented the British strategy as a means to address the heart of the crisis — fear among banks to lend. “This is not the American plan,” he said Wednesday. “Our plan is to buy shares in the banks themselves and therefore we will have a stake in the banks. We are not simply giving money.”

The US government should use any and all bailout money to invest exactly the way Buffett did.

Instead of buying toxic debt, they should invest in preferred shares with a yield and get stock warrants.

This would increase bank capital and allow them to ride out the storm and dispose the debt on their own.

If its good enough for Warren, then it is good enough for the rest of us.

Wish we could all get such a sweet deal. He is getting perpetual preferred stock that will pay him a juicy 10% coupon yield, and is getting warrants as a sweetener on the side that allow him to buy common stock for 3% lower than the current price at some time in the future.

What is a warrant? A warrant is a security giving the holder the right, but not the obligation, to purchase the underlying security at a specified price in the future. Much like the stock options that are granted to CEO's to come into a company and help it grow. If the stock goes up you exercise the warrant at the previous low price for instant large profit. If the stock price goes down you don't exercise the warrant. All upside potential, no downside risk. Meanwhile he collects the 10% dividend yield on the preferred, which is a cushion if the preferred should decline further in price.

Posted by: Futurejumps | October 10, 2008 9:18 PM

Everyone should take an economics course. I don't understand why basic econ and finance aren't part of standard high school curriculum.

Posted by: Anonymous | October 10, 2008 9:30 PM

The problem w/ the Gov buying stakes in banks is that it creates bad incentives in the marketplace.

There would be an incentive for the Gov. to give preferential treatment to bannks that it invests in. They could ease up on the regulation of these banks to help their profits or give them preferential Gov. financing.

It would open the door for politicians to use the taxpayers ownership stake in banks to pressure banks into performing politically favorable actions.

If they want to improve the flow of capital then why don't they just get rid of capital gains taxes. This would increase capital and the incentive to invest in capital markets and correct the favoritism towards investing in real estate.

Posted by: Anonymous | October 10, 2008 9:44 PM

You moved away from France because your family were a bunch of collaborators with the Nazis.

Posted by: ol john mccain | October 10, 2008 9:47 PM

HAHAHAHAHA.

Where is Paulson going to get those $700 billion in the first place? The US government doesn't have that money.

Their only way is to print $700 billion in Treasury notes and try to sell them to...?

Who is going to give Paulson $700 billion in cash, in exchange for some US Treasury paper? The Chinese, who already hold $2 TRILLION in similar paper? The Japanese, who have some $1 TRILLION? The Arabs? The Russians?

Let's assume Mr Paulson finally finds a group of BIG investors willing to lend the US that much money, at a time when the US economy is sinking.

Those guys are going to behave exactly like Warren Buffet: THOSE FOREIGN INVESTORS -not the US government nor the US taxpayers- ARE GOING TO GET PREFERRED STOCK, OR EVEN COMPLETE OWNERSHIP, OF US BANKS.

Posted by: Scooby | October 10, 2008 10:08 PM

Anyway, we know.

Make sure your a$$ is covered, but it's too late, anyway.

Cheers.

Posted by: Tom Quick | October 10, 2008 10:09 PM

Oh good, I was wanting to start a bank. Where do I sign up for the equity investment. I promise you I will be really careful with the money as long as you don't ask me what I am doing with it.

Posted by: Anonymous | October 10, 2008 10:13 PM

Did Tommy Birchfield invent some new form of communication? Or is he /WACKED/CRAZY/???

Posted by: John | October 10, 2008 10:14 PM

Almost an ex-American:

Guess what. The U.S. Communist Party is already legal. You remember the First Amendment, don't you? Didn't think so.

Posted by: Timo | October 10, 2008 10:21 PM

The whole bailout concept goes against everything people believe. Banks, Mortgage Companies and Congress have done just about everything to protect their own. All of these players got rich off questionable deals with excessive usury. People many times had to refinance, move out or sell out. Those people and others who are on the brink are somehow going to get help from the bailout. I think not. Their credit is very weak, while the Banking and mortgage execs pocketed the doe. The Banks and Congress do what they do best, which is to change the rules of the game to insure a victory for their own at the expense of others.

Posted by: Faded Dreams | October 10, 2008 10:27 PM

Please read related article titled: "It's Not Always The Pork. The Cows All Have To Be Fed Too." at http://www.cliffyworld.com/blogs

Posted by: cliffyworld | October 10, 2008 10:31 PM

Dear Mr. Paulson,
Instead of investing my hard-earned money in bank stocks, please just send my share back to me. These stocks are worth less than you are paying for them, or else others would be investing in them instead of you. Thank you,
Your friend,
David

Posted by: David | October 10, 2008 10:32 PM

Hey ya all! Paulson said, "As we develop plans to purchase equity ... we are working to develop a standardized program that is open to a broad array of financial institutions," Paulson said in a statement.

Paulson said the government's program would be designed to complement the efforts of banks to raise fresh capital from private sources. He said that the government's stock purchases would be of nonvoting shares so that the government will not have power to run the companies.

Okay everyone, Rush will tell you when it's time to panic..not yet..I think Paulsen is smarter than you think! He said he will not run the banks.
George Sorros was on pbs earlier tonite, and he was suggesting something that sounds like the "Stock Injection Clause" that was put in the paulsen plan..allows government to take over the bank's stock, rule the bank, and take over entirely..the treasurer has the option to do so if he desires/deems necessary.
So make sure Obama doesn't get in the white house, because if he gets Buffet in as treasurer...who knows what the two will concoct...

Posted by: hanarietta | October 11, 2008 1:07 AM

It looks like they are going with the ballpark and basketball court strategy. Destroy public finances and sell tickets to the game. Build luxury boxes and put people on ice. They'll give millions of dollars away and tell each other how smart and talented they are. We'll see next week. According to my source, there isn't much they can do to stop the storm. Get your season ticket punched. It's looking like a full court press and things are going to stop rolling so fast. Don't sleep too much.

Bye Post

Posted by: Post Revolution | October 11, 2008 3:12 AM

@Brian: Unless you lived in France in the 1940s, you did not experience this. And given that your name is Brian, I'm guessing you did not. Even the Left in France has done its part in the systematic dismantling of De Gaulle's nationalization of France, which received its, perhaps, coup de grâce under Chirac and Sarkozy. Listen, I think this is a good idea: get those ultra-capitalists reined in a bit with oversight and regulation. That way, instead of letting them pull down the civilized world with their greed, the State can say "no, I don't think so." If you disagree, Brian, perhaps you should come back to France. Oh wait, even the ultra-free-market Sarkozy is considering this. Sorry man, your side lost.

Posted by: Andy (in France) | October 11, 2008 3:25 AM

Billions are lost and billions more will be lost. More damage will be done, so sit back and hold on. Nothing you can do about it.

Posted by: Anonymous | October 11, 2008 6:05 AM

I wasn't born in trouble. My girl is shakin' and I got no control here.

Posted by: Trouble | October 11, 2008 9:17 AM

Does this mean we need to start selling all the destroyers and destroyer escorts and give the cash from the sale to Paulson and his creep Wall Street crook pals?

Posted by: Double Trouble | October 11, 2008 9:55 AM

They took me to the hospital and I swore I wouldn't go. Now I'm sitting bull on a 800 dollar bill for a one way ride I didn't even want. It was bloody and it's going to get bloodier yet! Hells bells.

Posted by: Trouble | October 11, 2008 10:09 AM

It's going to blood banking again. Let's get it up.

Posted by: IV | October 11, 2008 10:14 AM

Go bleed Hollywood dry to the bone and then come see us.

Posted by: IV | October 11, 2008 10:15 AM

We're down to playing with the illusion that money is. Read a book called A Distant Crossing. Fiction becomes reality.

Posted by: Anonymous | October 11, 2008 11:56 AM

How the meltdown started..Read the article "It's not always the pork. The cows have to be fed too" at http://www.cliffyworld.com/blogs

Posted by: cliffyworld | October 11, 2008 11:59 AM

An as the world turns, these are the days of our lives. I'm not sure about the fiction. I went to the grocery store today and the food was still real. I actually had to pay for it on top of everything else. Compare this with the Wall Street bailout. I guess through some magical legislative act, we're all going to do our shopping and Washington is going to pick up the tab. $700 billion buy lots of groceries. I wonder when the U.S. is going to start investing in the grocery stores. The way they work, we'll be paying all the stores to go bankrupt and anybody who knows a thing about running a store will be punished for knowing what the heck they are doing. We need a national lunacy day.

Posted by: Post Revolution | October 11, 2008 4:33 PM

"It seems to me, we have an insane asylum run by the inmates." Dick Pratt

Dick was the guy who fired the guards, suspended the rules and got everybody liquored up. The new Dick is the same as the old Dick. Hank is the new Dick in town. If you could pick one Dick to blame for the Wall Street mess, it might well be the new Dick.

Bush claims Wall Street got drunk and then Bush hires the bartenders to serve up drinks at the Treasury. Now we have a whole bunch of drunk Dicks in Washington increasing the bar bill by another $700 billion to alcohol poison our entire financial system. With this sort of logic, we can just turn all the banks into pubs and not ever have to pay for our P' & Q's.

Posted by: Post Revolution | October 12, 2008 5:12 AM

It appears that the land Mark Twain house will soon be empty. There is another plan that you don't know about. The Bank will be involved and the government will not be involved. Why? Because the government is now broke of course. $5 millions needed and that does not come easy. In the fantasy world most Americans are now enjoying, $5 million is a piece of cake. There is restoration work that needs done. If you count on politicians, you not only end up with a house you can't afford, you end up out of work. Business works the same as it ever has. Please contact me about the Twain house situation if at all interested. If you can't get ahold of me, I'll be busy until the mission is complete. This mission looks a little longer than first thought. Good luck with the crisis. That mission is over and they can take it from there. Need plenty of capital. Have tools?

Posted by: Post Revolution | October 12, 2008 9:56 AM

Post Panic is coming on Monday. Look forward to grand political speeches and million dollar ads to direct you to the nearest soup kitchen later in the week. All data says we are going from the crunch to the crush followed by the crash. The socialists will all be serving soup to the other socialists, so they won their socialism at the expense of capitalism. There will still be expenses and work that needs done, so capitalism is never done. We're not sure about Post Capitalism and may never be.

Were we so good you couldn't find a successor or so rotten you don't give a hoot? I wish I knew.

Posted by: Post Revolution | October 12, 2008 10:15 AM

Socialists all report to the nearest Citgo for Hugo Chavez rally CD's.

Posted by: Post Revolution | October 12, 2008 10:19 AM

Something powerful.....
"The book itself had the appearance of having been stolen from some court of justice, and perhaps his knowledge of its antececdents, combined with his own experience in that wise, gave him a reliance on it as a sort of legal spell or charm." Great Expectations

Follow your own path with fidelity and courage. Invest in the children. Banks can and do go out of business as we can clearly see. Without deposits, investments yield fools gold. The children are priceless and quality pays for itself. With quality there is capital and with capital there is improvement. Rewarding low quality produces more low quality and low yields follow. Your dollars will start buying more oil and more food as oil prices fall. Gravity is always at work. Don't trust me. Grab an apple and let it go. You'll see for yourself or you won't. I better go tend to my apple trees. Nobody else will and why should they?

Posted by: Post Revolution | October 12, 2008 12:47 PM

Now they are going to try merging the banks. With a big crisis, you need bigger banks. If big banks created the crisis, then bigger banks can create a bigger crisis. Better hire more reporters Post. As the crisis grows, so will the news about the crisis. This is much bigger than the bailout that was old news. This is looking like the new new crisis. Maybe they will double the money to create double trouble. The President was talking about people buying desks and making desk. I'll bet you can get a deal on a whole bunch of desks and computers on Wall Street. It's looking like a fire sale and with the new bailout/crisis you can pick up toxic assets and own worthless stocks. They aren't on paper, so you won't have shipping costs. You can store them on the cheap used computers you buy at the fire sale.

Posted by: Post Revolution | October 12, 2008 2:42 PM

There have been calls for cooperation and you know how this operation works by now. I thought I better check with a friend of a friend about it. The friend says that there was a mayor up in Boston by the name of Mal Nichols. He was called the night mayor. So this night mayor has some troubles. People think he has money when in fact he's broke. They put through a pension for him, so they all cooperated for the good of the old people.

It seems like it's always a friend of a friend when it comes down to it. The bottom line is that the old people look to need a bailout more than Wall Street, if you are a bottom line thinker. Thanks.

Posted by: Post Revolution | October 12, 2008 10:06 PM

Another night mayor.
"Swashbuckling pirates were at work in our corn patch today. Corn season being over, my husband went out in the morning to chop the plants so they could be tilled under. With a sharp machete in one hand, he made vigorous back-and-forth strokes across every standing stalk, starting at the top and working his way down until each one had been cut into six-inch sections." Garden section

The neighbor kid comes over to the house on his bicycle. He say the creep across the street said I was dangerous and he should stay away from me. I said, then what are you doing over here. My machete is laying there and the kid looks at it and says, is that a weapon. I tell him that's a tool, but I guess it could be used as a weapon if needed. We talk and I give the kid some apple seeds to go plant around the neighborhood and tell him about Johnny Appleseed. The kid ended up moving and as for the creep neighbor, well his wife left him. With my corn being done, I usually just pull it out by the roots and throw it into the box whole or leave it on the ground and throw dead leaves over it. There are other things you can do if you understand corn. I have some squash and that is what I use the machete on. I guess you are corn people or squashed people. Don't use your machete on people.

The Iroquois people have what they call the three sisters, the "sustainers of life". These sisters are called corn, beans, and squash.

The corn Spirit was so thrilled at being one of the sustainers of life that she asked the Creator what more she could do for her people. The Creator said that a beautiful doll could be formed from the husks.

The Creator set to work to form the doll. When finished he gave the doll a beautiful face, and sent it to the children of the Iroquois people to play with, and to make them happy.

The doll went from village to village playing with the children and doing whatever she could for the children.

Everywhere she went everyone would tell her how beautiful she was, so after a while she became vain.

The Creator spoke to her and explained that this was not the right kind of behavior, and she agreed not to be this way anymore.

The Creator told her that if she continued with this behavior he would punish her, but he would not tell her how he would do it.

She agreed not to act that way again, and things went on as before.

One afternoon she was walking by a creek and she glanced into the water. As she admired herself, she couldn't help thinking how beautiful she was, because indeed she was beautiful.

At this time Creator sent a giant screech owl out of the sky and it snatched her reflection from the water. When she looked again, she had no reflection. This was the punishment the Creator put upon her.

Posted by: Post Revolution | October 12, 2008 10:38 PM

When an Iroquois Mother makes a doll for her child, she tells them this legend.

This is to remind the child that it is wrong to think they are better then any one else, and they must know that the Creator has given a special gift to everyone.

Posted by: P.S. | October 12, 2008 10:41 PM

Good night mayor. Keep safe.

Posted by: Anonymous | October 12, 2008 10:45 PM

I don't think the steps taken by treasury secretary Hank Paulson will stop the Global Economic Crisis. Info on the financial crisis can be viewed at
http://www.globaleconomiccrisis.com

Posted by: Sheldon | October 12, 2008 11:56 PM

"He is survived by his wife and four month old daughter." Lost everything. Hank and his 700 million billion friends can make the four month olds pay for their fraud now. What's next? Professor Bush. Screw you. Washington is killing US.

Posted by: specialdeputy | October 13, 2008 4:56 AM

You don't need a website to understand it. Hank and his pals robbed the world. Pretty simple stuff. Close Washington now. The Pentagon can take over from here. Kill anybody with more than 100 million.

Posted by: Anonymous | October 13, 2008 4:59 AM

Here are some of the words on the washingtonpost.com home page right now: fear, foreboding, meltdown, trampled, pain, ugly. One other word on the home page: End. As in "Is this the end of American capitalism?"

Na. Looking over the numbers and they really suck. Turn half the lights off and cut expenses. You can be Post Socialist. If they can get a high yield I can't see how they can fail. If they don't I can't see how they can be helped. Maybe the Fed will invest in the Post and get that bailfast money to pump up the numbers. You guys can print Chinese puzzles and write stories about the babies dying across America from the milk with solvent in it. Don't forget the propaganda about what swell guys are running things at Goldman. Don't write about all the bank failures. Capitalism failing the failing. Aw shucks, Barack and Warren will fix everything up. It will be an affair to remember. We all get rich.

Posted by: Post Panic | October 13, 2008 7:28 AM

Now they are talking about offering unlimited dollars. Is that like unlimited newspapers. Just print a billion newspapers a day and circulation will go way up.

Posted by: Anonymous | October 13, 2008 7:48 AM

There's quite a bit of content out there to look at regarding the stock injection. Of course the NPR shows are tremendous - they should be required listening for every American. They are so well done. There’s another site out there that’s really informative - http://www.StockInjectionPlan.org. The site is really informative and well done. It’s not This American Life - but it’s really, really good & informative.

Posted by: Vigdor Burack | October 14, 2008 2:23 PM

Politicians lie and mislead the voters continuously, the investment of the 125 million is not voluntary as Paulson says. The banks are being forced to take the money which will dilute shareholder value. The death penalty needs to be imposed for politicians who lie and mislead the public.

Posted by: Ray | October 19, 2008 5:24 AM

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company