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To: bentway who wrote (151387)	9/27/2008 10:56:07 PM
From: MulhollandDrive	Respond to of 306849

another alternative plan: tavakolistructuredfinance.com Specific Proposed Alternative to (the Various Versions) of the Paulson Plan by Janet Tavakoli - September 25, 2008 Creditors including credit default swap counterparties failed to renegotiate terms when they had the chance. Financial institutions did not recapitalize when it was easier (within the past 2 years) and now they cannot because no one trusts the value of the assets. Now we do not have time for Chapter 11 in which either 1) creditors agree to discount debt in exchange for warrants (for potentially viable enterprises) or 2) transform (possibly discounted) debt into new equity (a new capital structure in which former shareholders are wiped out). Rather than adopt any form of the Paulson Plan, which uses billions of taxpayer dollars and forces risk and potential losses on taxpayers—instead of those who enjoyed the gains—I advocate an alternative. Instead of the Paulson Plan, we can force creditors to accept a restructuring plan (this was done during the Great Depression). Creditors (debt holders) including credit default swap counterparties would be compelled to accept a restructuring plan. That requires partial forgiveness of debt in many cases and/or a debt for equity swap. If we are determined to violate personal property rights, I prefer it be done through a forced debt forgiveness and a forced capital restructuring (debt for equity swaps), rather than through a massive bailout (any of the various forms of the Paulson Plan). The Paulson Plan destroys capitalism (those who stand to gain should bear the risk) and violates the spirit of democracy established by the Founding Fathers of the United States. Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct professor of derivatives at the University of Chicago's Graduate School of Business. She is the author of: Credit Derivatives & Synthetic Structures (John Wiley & Sons, 1998, 2001) and Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, 2008). Her upcoming book: Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street will be released January 12, 2009. Clients of Tavakoli Structured Finance have the benefit of proprietary consultation, which is not available in any other paid or public forum. Clients also commission proprietary research and analysis.