Wednesday, October 01, 2008

More thoughts on the "rescue"

I'm obviously not an economist. I'm a writer who's only really knowledgeable about what I'm paid to be knowledgeable about. And a couple other things. But I got an email the other day from Whitney who got it from someone who works in the investment biz and it kind of made sense to me in terms of where I stand.

In short, I'm happy to help keep the economy going and keep companies afloat with some sort of cash outlay. But I also realize our position here (ie, you and me). We're what they call an "investor of last resort" which means the deal/loan we give any troubled businesses better be pretty goddamn sweet for us—and with a lot of upside. Again, it's not our (taxpayers') fault that these businesses found themselves in this mess. We just happen to have the money, they just happen to be screwed and we are being asked to make a very risky investment. We should get something out of it. That "plan" the other day sounded like charity. Like you and everyone else, I'm not in a real charitable mood right now.

Here is an excerpt from the email:

"Look at what Buffett did with Goldman Sachs. He made a $5bn investment at what looks like an attractive valuation, he got preferred stock so his money gets out before any other equity holder, he gets a 10% interest rate, and 100% warrant coverage in the money. That's the kind of deal the investor of last resort gets."

That's the kind of deal we should be getting.

Too bad we've got a group of third graders over in Washington who can't shut up long enough to do something. You're all like at least 50 something years old!!!!! Grow up and get along!!!! If you were a company, you'd be like the worst company to work for ever*!!!!

* Crack Whore Temps, Inc. is still the actual worst company to work for

1 Comments:

Blogger biggy said...

David Letterman once had a top 10 list of worst jobs. #1 was " You know the guy who counts the change at the arcade? yeah, well, his assistant".

9:56 AM  

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