First Citi facilitated accounting fraud for Enron, then helped WorldCom cover their tracks in return for stock, and now they hold tons of predatory and fraudulantly originated mortgage backed securities that are dragging down the entire market.

Meanwhile Citi still refuses to mark their MBS’s down to proper market value, their CDO’s are still priced at 40% of what Merill was forced to sell theirs off for, and citi refuses to help facilitate a solution by modifying the rates of these obscene adjustable mortgage rates down to something that is even close to market value.

Let’s not forget the estimated 80+ billion of debt that isn’t even on Citi’s books at the moment (in typical Enron fashion).

Let Citi fail and send Vikram to jail.

• Goldman gets the right to call the preferred at any time at a 10 percent premium. Ouch again.

• Buffett gets $5 billion worth of warrants with a strike price of $115, or about 43.47 million shares. The warrants are good for only 5 years.

If we’re going to use a ton of taxpayer money, let’s not waste it on a bailout, let’s make a smart investment. Bernanke and paulson are running the fed like a hedge fund, a badly badly managed hedge fund.

You need to all relieze one thing not only are the homeowners in bad loans getting hit hard but we are getting hit double because we are tax payers too.

So, Why not let the dominos fall where they must and let us pick are selfs up without hurting the US money anymore than what it has been hurt..

If they where sleeping during the boom.. what makes you think they are going to wake up now….

Everybody’s looking for a bailout. Now these companies are demonstrating a sense of entitlement. I believe that we the tax-payers should come out ahead if we are going to foot the bill.

If we should be the lender of last resort we should make terms that will help these companies survive – but not to our detriment.

The elderly have been the most powerful lobby group in the past because they are the people who have historically voted. The elderly have benefited greatly from entitlement programs for many decades as many have taken out far more than they ever put in.

Now the Baby Boomers are becoming the elderly and they are beginning to collect Social Security. Because the system is a Ponzi-scheme and Congress has relentlessly raided the ‘trust fund” over the years, they are counting on my generation, generation-X to keep those payments coming.

My generation as well as those who follow Gen-X are faced with the knowledge that in order to support the Baby Boomers on Social Security and Medicare, we have to face the fact that we have been working for the past 20 years, paying into this system and will receive nothing in return. Not only that, they are demanding that we continue to work and pay even MORE into it while we KNOW that we are getting the old shaft. That’s supposed to be our civic duty.

A great deal of concern has been expressed about the government taking over companies like AIG. The government owning the dominant players in various industries brings about fears of Socialism or Communism. With the AIG proposed bailout, the government would own 80% of the company. The stock has consequently fallen headlong to reflect such a dilution.

My thought on the matter is that the government should not retain ownership but rather the new equity for all “bailed out” companies should be placed in “privatized” retirement accounts in custody for generations following the Baby Boom who have been paying into Social Security for a specific number of years. These can be special class B, dividend paying shares with less voting power, leaving the control and operation to the private sector.

If companies like GM, Ford & Chrysler need to come to us for a “bail out”; they should be subject to the same terms. Nobody would force them to go to the tax payer. If they hadn’t run their companies imprudently, they wouldn’t have to agree to such terms. This system would keep the government out of the operation of these companies, save jobs and avert a meltdown while helping to solve an enormous problem we are going to be facing in the coming years with Social Security. Any other plan will likely result in the government turning around and selling off valuable assets to Goldman Sachs for pennies on the dollar while the tax-payer gets left with the garbage. This way the only people who lose will be the people who purchased the stocks of these companies, which is fair since that is the inherent risk one takes when investing in equities. That is why we diversify.

The same goes for the mortgage bailout. The assumptions are perhaps overly pessimistic as to the number of expected “toxic mortgages”. If the tax-payers are expected to assume the bad mortgages, our elected charlatans need to see to it that the good mortgages in the bunch end up in the custodial accounts as well.

These custodial accounts need to be “tamper proof”, meaning that under no circumstance can politicians raid them for their prodigal spending. I expect resistance to such a proposal for the same reason why they resisted “privatizing” Social Security in the first place: In such custodial accounts, Congress cannot plunder them and replace stock with IOU’s.

Their specious rhetoric about how “risky” this would be wouldn’t be as effectual because we are already agreeing to take the risk due to the alternative risk of allowing these companies to fail. They couldn’t claim that this is a conspiracy to drive up stock prices through excessive buying because the stocks are falling as a result of share dilution. The beneficiaries would be the people who are going to become the victims after all the Baby Boomers are receiving their Social Security checks.

We could use this “rescue plan” as an opportunity to deal with two problems at one time and set in motion a plan for the gradual phasing out of Social Security starting with Generation X. Eventually these companies will come back and command market caps in the hundreds of billions of dollars. Once that happens, the positions in such accounts could be gradually unloaded into the marketplace and replaced with low cost index funds that have historically returned over 10% per year long term without having each beneficiary day trading their accounts, a preposterous notion the opponents of privatization have often propounded in order to maintain the status quo of their unabated plunder.
http://www.tableofwisdom.com/MrArbitrage_on_Market_.html

I don’t buy this bailout plan, life isn’t that simple!