Do you understand that bailout specifically permits the buying of bad debt from any bank anywhere on the globe as at the discretion of the the treasury? Are you aware that the bailout specifies that no court will be allowed to examine the appropriation of the 700 billion? I would say 2 very good reasons against Paulson's bailout plan.
"If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen." This is exactly what happens. Saw it happen in Asia. Also saw banks not lending despite all the molly coddling they got. Banks care about themselves and themselves only. The real issue is that most companies depend on ST bank loans for working capital. This lifeline has to be kept open and is the priority NOT GS or MS. If there is no working capital lending, otherwise viable companies will have to close and the unemployment will affect housing prices. Asia had little of this fallout as nobody moved to close down zombie companies. The problem is being exacerbated and delayed by Paulsons attempt to force an Investment bank friendly package on the people. If he was not being dishonest something would probably be done by now. There are known to work models ie Scandinavia model or IMF Asia model. Why, if Armegeddon is a risk is Paulson trying to force the adoption of an UNPROVEN plan with all the attendant risks from it being unproven. Answers on a postcard to Goldman Sachs, C/O Pensylvania Avenue, Washington DC. Another problem is that many retail and manufacturing companies rely on providing financing as their profit generator, not the product - this is why so many of them trade like a finance company. Basically, those who can't adapt to tighter credit by reworking their businss model will just have to pay the price, although unfortunately it won't be the failed CEO who is paying, but [disgiustingly] it will be the CEO, not the laid off workers who is paid*. Overcapacity, uncompetitiveness and inability to adapt has to be elimianted as in a normal business cycle. What part of this don't the "free market" Gummint and congress lobby troughers get? *Something has to be done about these multimillion dollar payments to CEO's who fail.