Message Font: Serif | Sans-Serif
No. of Recommendations: 21
I agree with his suggestion to write our representatives. Here is what I sent to the Senate Banking Committee 24 hours ago:

I have noted many concerns about the $700B financial rescue plan, and wanted to share mine.

Any Wall Street deal giving a company cash for debt where the debt is risky will always include significant warrant coverage (an equity-based interest in the company). That is because for a certain portion of these deals the debt will not be repaid. You have to get very good returns, from the warrants, on the ones which pay off to make up for the ones which do not.

Secretary Paulson, a top Wall Street guy, knows this like the back of his hand. If we, as taxpayers, do not get "warrant coverage" from the financial institutions for taking over poor quality debt, whose value is very uncertain, this proposal is in my opinion a scam on the taxpayer. This should not and needs not be a transfer of wealth from the American taxpayer to the stock and bondholders of troubled financial institutions, but something that creates a financial system "timeout" and has the potential to cost the taxpayer very little.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.