Comments on: Paulson v. Buffett

By: RealTime Economic Issues Watch

RealTime Economic Issues Watch — Fri, 16 Jan 2009 17:04:06 +0000

[...] quite explicit up front. The announcement is suspiciously quiet on this point, perhaps due to the recent spotlight on warrant pricing [...]

By: Bank of America Gets Quite a Deal « The Baseline Scenario

Bank of America Gets Quite a Deal « The Baseline Scenario — Fri, 16 Jan 2009 06:24:12 +0000

[...] quite explicit up front. The announcement is suspiciously quiet on this point, perhaps due to the recent spotlight on warrant pricing [...]

By: January 12, 2009 « Rising in Phoenix

January 12, 2009 « Rising in Phoenix — Mon, 12 Jan 2009 16:12:19 +0000

[...] know I sound like a Paulson apologist (although here are my anti-Paulson credentials), but here [...]

By: Stefan

Stefan — Sun, 11 Jan 2009 18:56:04 +0000

Very good article. The greed of equity holders let to the meltdown. They should loose all their capital and the government, as the lender of last resort and to prevent a systemic collapse, should take over the capital. This can be in a trust outside of too much government interference. Later when the situation is stabilized and the system is more balanced then the government can redistribute the capital in a public offering. The taxpayers would get their money back and the old greedy bastards would loose everything. Wealth would be redistributed!!!

By: oops

oops — Fri, 09 Jan 2009 23:00:07 +0000

Buffet 5 yr notes 3.9%. UST 5yr 1.51%. He can’t monetize his debt either. http://cxa.marketwatch.com/finra/BondCenter/BondDetail.aspx?ID=MDg0NjY0QU0z&Range=1year&GraphType=Yield

GS largest shareholders are mutual funds and pension funds that index. They just lost money for the first quarter since going public. Do we really need to increase their interest expense? Hasn’t CALPERS said they might need to decrease benefits of retirees?

Buffet’s obligation is to maximize profit. I see the government’s obligation as insuring solvency of the system.

Some say that the government should take a stake in homes to prevent foreclosure and in return get a piece of the future upside. In that case, should we really stick it too them like a good investment banker would?

By: Marvin

Marvin — Fri, 09 Jan 2009 15:58:25 +0000

You suggest that, if the terms were harsher, banks which did not need the money wouldn’t have taken it. But that would have marked those who did take the money as “weak,” likely leading to a run on those institutions. It was to prevent such an outcome that Paulson pressured all nine banks to take TARP money, even those which might not have needed it.

By: Ruben

Ruben — Fri, 09 Jan 2009 14:47:00 +0000

To be fair, didn’t the TARP also purchase political capital? I’m not sure how one can value the leverage Treasury has obtained over the banks when it come time to enter into re-regulation, but it seems that in present day, the wheel is considerably greased.