Reply #67: Yes...here is a quick way to do it much cheaper.

[Oregone]

You buy low and sell high.

Citibank now has shares at 3 bucks a pop. The government can buy em up until it has 51% ownership in the company. Then the government can make a bid for the company, offering a price equal to 1 cent a share. It just so happens, at least 51% of the ownership is going to agree to that price (so thats a loss on the previously bought shares--big deal, you'll get it back later).

You now own Citi bank for very, very little (and its assets). Congratulations! Now, you can do Geithner's magic plan and sell off the assets (its all profit now, since you own them and the cash gets injected into our company). At this point, what the hell, subsidize the investor if thats what it takes for infusion. There may be some loss absorbed because these assets probably, in all, have a net negative value (afterall, the banks are not solvent), so who wants them all?

Now that Citi no longer has these damn assets, its solvent again and clean. Its magic. A clean solvent bank. Wait a minute! What would the stock price be of a large profit making bank with no toxic assets?!? Much, much higher than 3 bucks a pop. Thats called profit.

Hell, you can even takeover, move assets to a separate holding firm, then re-privatize the bank immediately to ensure no normal operations are impeded upon. Then, the holding firm can try Geithner's private/public partnership mumbo jumbo. With clean banks and credit flowing, some of these assets may gain value sitting in that holding company (does this approach ring any bells?--lets not reinvent the wheel here).

Here is the thing...for every penny that the government burns on Geithner's plan, it ensures the current shareholders of the bank don't get burned. My approach does the opposite. The shareholders of these shitty banks get burned for owning shitty banks, and the government profits for fixing them.

Now thats the elephant in the room. Thats why we can't consider my approach. We think its anti-American to burn owners of shitty companies. But isn't the US and capitalism founded on a notion of meritocracy? Isn't it rather anti-American to essentially provide a welfare system for these shareholders?

Thats what this fancy financial instrument of Geithner's does. It hides us ensuring no private people lose money, and instead the government does (the people do). But by doing so, it is expensive and in no way ensures credit flows again from the benevolent rich who wouldn't plant a penny in the ground in Detroit, expecting a money tree later. If you can provide liquidity cheaper, sell off the assets and directly profit/loss from it, and turn around to tell the owners to bend over, is that so horrible? Instead, we are being asked to bend over...further, again.

The idea of buying, cleaning, and selling the banks wont ensure credit will flow again anymore, but at least the government makes money by ensuring credit CAN flow again. Then they can ensure the profits are reinvested into improving the economy (making it more profitably for investors to invest) with a Keynesian type stimulus

BTW...don't use your critical time excuse. It wouldn't take much time to perform the acquisition. The next step, for all I care past that, could be Geithner's approach. And yes, people would re-invest back into CITI. Why. Because now its solvent! Of course people should realize that when a bank fails through shitty practices, its owners also suffer. If you take away banks ability to do this shitty practices, people gain as much confidence as they had before they knew they existed.