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To: White Bear who wrote (65089)	9/23/2008 9:57:08 PM
From: Keith Feral	Read Replies (2) \| Respond to of 118717

I think it's pointless. Why should they pay a premium for assets marked at fire sale prices when they can just change the accounting rules to cause the same effect? I listened to the drama on CNBC. As soon as BB revealed this ambitious plan to spend $700 billion to buy the banks assets at a premium, Congress started thinking how much money they should demand from the companies. The irony of a recession is that you finally get to buy assets for good returns. The once in a lifetime risk that Greenspan was talking about represents the rare opportunity to put some capital to work in equities, fixed income, and other assets that are worth holding onto. Everyone is out buying stocks and buying puts on the market to keep things from running away. GS payed Buffett 10% for a preferred security. I would love to buy some more of that. If Congress can get anyone to take their $700 billion deleveraging scheme in exchange for warrants and executive pay limits, God bless them. I think it's way too much way too late. However, I would love to see it go through just to give the market some more liquidity. Looking at all of the preferred funds, I think an investor can finally buy some of these funds with maximum yields and limited downside risk. If the government does act as a SWF, they should get some warrants for the risk. If Buffett gets at the money warrants equal to his preferred investment, I guess the Treasury deserves the same treatment. The real problem will happen when the government tries to unload all of these investments. Looks like the Treasury could have a $10 trillion SWF in a few years with 10% YTM on FNM, FRE, AIG, and RTC 2 including all of the equity investments from the banks. That would almost equal the $11.4 trillion in national debt. Financially speaking, the risk reward would be a brilliant move. I guess Paulson is trying to avoid making this look like a mandatory takeover after his heavy handed takeovers. However, the depressed value of the securities demands some return from the banks that need to unload debt.