> Why can't the banks be forced to recapitalized? It seems like they're
> dragging their feet about it, hoping a bailout will come along and save
> them. (Yes, some banks are recapitalizing, but then they're the ones who
> don't need a bailout.) If the alternatives were issue more shares or go
> under and be nationalized, more banks would issue shares, it seems to
> me. But if everyone is bending over backwards to offer them a bailout
> then they'll just take a bailout.
Why don't governments offering bailouts demand stock?
Your company got something wrong, might go under, thousands of voters would lose their jobs, others their investments? You'd like a few billion from the federal trough? Or just to borrow a few billion with a government guarantee, so you and the banks get any profits but the taxpayer takes the risk?
Sorry. This is a market economy; it's not our problem.
But tell you what, You're stock's dropped from $50 to $5. We'll buy a whole bunch at $2 if that helps. If you do well, we'll sell it off in a few years at a nice profit to the taxpayer. If not, we'll lose no more than in any other bailout scheme.
Mostly, we won't interfere with management. We know civil servants aren't suited for that. However, there's one area where you can expect some change with us on the board. Forget big payouts to departing managers.
This sounds like a fine idea to me, but I suspect I might be missing something, oversimplifying, ... Any economists care to chime in, tell me where it fails?
-- Sandy Harris, Nanjing, China