I have been meaning to write about Warren Buffet and the MOAB (Mother of All Bailouts).
It seems that Buffet supports the bailout. He was on CNBC today saying there will be major consequences if there is no bailout. But he also said the securities bought should be bought at market price. So in a sense, he was not supporting Ben B's plan. They want to OVERPAY for the assets. They don't want to buy at fire-sale price and they don't want to have equity because then the capitalized institutions won't participate.
So unlike AIG, they just want to give away free dollars to these institutions.
HP wants complete authority. NO questions asked. Forget about balance of power.
Another issue here is trust. To many people this sounds like Iraq all over again. Remember WMD? Iraq acquiring Nuclear materials? Can you hand over a blank check to Paulson?
With their plan, they want to send billions of dollars worth of Christmas gifts so they are well capitalized.
I know we have to do something. But I don't want to give away free gifts to banks and put the tab on next generation.
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