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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: gerard mangiardi who wrote (103331)	10/21/2011 5:29:53 PM
From: RetiredNow	Respond to of 149317

Sure, but gerard, the question is how do you recapitalize the banks without penalizing the 99% of Americans who had nothing to do with the risks taken by those banks and the poor management at those banks? The answer is simple. Let the free market take care of it. That means, if those banks need to be recapitalized they have several choices: * float additional equity shares on the open market to entice investors to recapitalize the banks for a share of future profits; additional equity floats are dilutive to existing shareholders, but that's ok. It's existing shareholders who took the risks, not the 99% of Americans. So loss in value goes to the risk takers not the 99% of Americans. * Sell off productive assets to shrink their balance sheet and raise reserves to recapitalize. This means, they will be forced to deleverage, which means lower profits and less risks, which means lower stock prices, which penalizes existing shareholders, but that's ok because the loss in value goes to the risk takers not the 99% of Americans. * Write off non-productive assets and take a big loss on the balance sheet to bring assets back in line with reality, which will result in an immediate share price drop and loss of value for existing shareholders. However, they took the risk, so this is only fair, rather than dumping the losses on the 99% of Americans. * If cashflows aren't sufficient to pay ongoing business needs and maintain legal reserve requirements, then declare bankruptcy, and go through a structured reorganization that typically results in the bond holders taking a haircut and the equity holders getting wiped out. But that's ok, because these are the risk takers who would sustain the loss and it is only fair they should lose money instead of the 99% of Americans who had nothing to do with those losses. All of these free market remedies were available back then and are available today. These remedies would have shielded the 99%. However, both Bush and now Obama and all their lackeys preferred to steal from you and I to recapitalize the banks by lending them money at 0% interest, by printing money to buy their toxic assets at full value despite their market impaired actual value being closer to 10 cents on the dollar, and by TARP, and other transfer of wealth schemes that stole money from the 99% to deliver it to the top 1%. So again. What our government is doing is criminal theft. It's grand larceny. It's criminal collusion with banks. A healthy financial system and economy needs sound banks. Yes. But we don't need THESE banks. Let's let the free market dismantle them or recapitalize them through the remedies above and let the free market exalt the banks that were prudent with shareholder's money through rising share values. Let's not allow our government to continue to reward the gangsters.