George Soros has written an excellent article over at the Financial Timesthat does an excellent job of explaining the current crisis and how to best fix it.
The injection of government funds would be much less problematic if it were applied to the equity rather than the balance sheet. $700bn in preferred stock with warrants may be sufficient to make up the hole created by the bursting of the housing bubble. By contrast, the addition of $700bn on the demand side of an $11,000bn market may not be sufficient to arrest the decline of housing prices
In other words the Buffett deal. If you haven't read about that deal here it is in a nut shell
Berkshire will buy $5 billion of Goldman perpetual preferred stock that carries a 10 percent dividend.
It also will receive warrants to buy $5 billion of common stock, or 43.5 million shares, at $115 per share, within five years, which could give it a roughly 9 percent stake in Goldman.
Congress is ready to give the biggest welfare package to Wall St. in the history of the world and put the people who created the problem in charge of fixing it.
I was wondering what Bush was talking about tonight when he said that emocratic capitalism is the best system in the world. He want's to make sure we get nothing for this. that is democratic capitalism. We go broke and bankers get welfare.
I really urge everyone to call your elected representatives and fill up their voice mail tonight.Let them know that we will not stand for anymore crony capitalism. This is Haliburton on steroids.
This deal will just keep cheap money flowing to the banks, continue to depress wages, and insure that americans remain debtors. We need a real economy that puts people towork in decent paying jobs, not another shell game setting up the next bubble in trickle down economics. They make boat loads of money and we get boat loads of debt.