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Wednesday, October 01, 2008

Comments

Alex Tolley

"So it is clear that the main prong of any "rescue" plan must serve to advance the recapitalization of the banks. Cash transfusions in return for warrants are a good way to do it, as it lets taxpayers share in the upside.""

Absolutely correct. But notice Paulson was very against that idea last week. Of course the problem is that this is effectively temporarily nationalizing the banks, something that is anathema to free-booting (or should be looting?) bankers. When the crisis is over, I think we need to look very, very carefully at banking regulations, recognizing that unfettered banking was never a good idea, something we learned after 1929 but took 2 generations to forget.

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