Bailout News: Gasparino Says 'Bad Bank Plan Hits Snag'
Jan 30, 2009 at 8:26 PM

Without comment on his reliability, I present the following CNBC Video from Charles Gasparino.  We all know his track record with breaking stories.  Take a rip inside and see the CNBC Video.  If true it is outstanding news. 

Here is the Video from CNBC.

Plus we have some analysis from Carney at Clusterstock inside.

Same problem as always: how much do we taxpayers bid for these assets.  And if we bid too little then the whole plan never happens.  Good.

I will offer my solution again:

Sieze the banks.  Put them into government receivership.  Then look at the assets honestly for the first time.  Write them down dramatically.  All of them.  Force the BONHOLDERS to take the hit(not the taxpayers). Wipe theses bondholders out.

Then re-capitalize with taxpayer dollars.  We will invest only after the existing BONDHOLDERS have been wiped out.

Read this piece by fund Manager Whitney Tilson for a much longer version of my summary above. 

Also see this piece by University of Chicago professor Luigi Zingales for a slight variation of my plan.  Including another alternative.

Fianlly, see this summary of Dr. Zingales piece here by Blodget at Clusterstock.

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