I like some of these ideas better.
http://dealbook.blogs.nytimes.com/20...t-alternative/
Why is there no discussion of a bailout modeled after what the Swedish govt. did in the 1990s?
It seems their solution achieves the goals of the current bailout.. which is simply to facilitate loans on the street by injecting capital? (ie: forcing banks to mark their assets to market.. at whatever value the market determines to be, then recapitalizing the banks with tax payer dollars in return for warrants)
The current proposal of simply buying the toxic assets is not politically nor ethically feasible. The Swede?s solution forces the banks and their investors to be responsible for their actions, reduces the risk and burden on the taxpayers, and allows the taxpayers a potential reward if the bailout is successful.
Ricciardi?s solution doesn?t work because with the government backing the assets, this sets an artificial value for the assets.. the taxpayers take the risk while private investors get the benefit.
? Posted by Norm