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I don't disagree with your view of the 'Leaders' and others who got us here. If you look at some of my other posts (you might be the first), you would see a couple of themes dealing with the 'bailout'. They are:

(1) Seeing that something is likely to be done, create a very good investment model for 'us' to follow. Using DIV (Derived Investment Value), we would have a very good margin (asset coverage), a high return (high discount rate), warrants to provide a kicker, participation in tax losses to provide an additional kicker.

(2) I've advocated using an outside group of trustees/Directors pulled from the best knowledge/experience areas in the country. I try to keep the politicians as far out of control as possible.

(3) I've also advocated pulling all possible legal violations together under a RICO Statute that would go after Sub Prime Profiteers. The violations would include mortgage/banking/thrift licences, fraud, insider trading, violations of SOX, and anything else.

(4) I've advocated going back to the exiting CEO's and Others, and seeing if payments could be reversed due to Gross Negligence/Willful Misconduct.

We were just about taken to the cleaners by Paulson and Bernanke. I'm still stunned and angry at all of our largest and sophisticated financial institutions, who allowed this to happen - including purchasing this crap. The senior management, Directors, Risk Managers, Credit Chain, Auditors, Appraisers, Rating Agencies, Credit Enhancers, Regulators and others, should all be held responsible for misconduct and gross negligence.

I know this won't happen - they will generally just do what they want. But I thought this could work better than what they are proposing. This whole thing is very socialistic and takes a big slice out of our free market system. I know it and don't like it. The arrogance that's been evident is disgusting.

But - when I look at the real liquidity crisis (and it is real), I'm proposing a compromise position, which I think optimizes our position within the context of this mess.

Some specifics relative to your reply include the use of the valuation tool called DIV. This is like taking a DCS (Discounted Cash Flow) and making it DCS squared (It's a very high margining valuation). I'm trying to put us in the position that the Opportunity Funds enjoyed in the early '90s/RTC days. I'm pushing the economic losses right back to the Banks and, as they recover, we get the economic benefits through the warrants and participation in the value of the tax losses.

I also think we should cull the Management and Directors of the sellers as any active investor would.


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