Bankruptcy, not bailout, is the right answer

I'm the person who has the "grain of truth" opinion. There was a good editorial on this in the Wall Street Journal friday. I'll see if I can find it again or link to it -- they were proposing a "Preferred Plan" with government purchase of preferred shares of stock (preferred stock is more secure than common stock). Honestly, I've grown so tired of all of this I'm not listening to it much anymore. I should tune back in.

ETA: The Public Deserves a Better Deal
http://online.wsj.com/article/SB122238667352477103.html

[GrayMatterWife]

Re: Bankruptcy, not bailout, is the right answer

I'm sure his economic analysis is right. I'm no economist and wouldn't argue about it.

However, his explanation of how bankruptcy works and why it would be preferrable is painfully overly simplistic. Among other things, he starts out with the (unspoken) presumption that the financial institution would--in fact--be able to reorganize and confirm a plan of reorganization (that is, complete a chpater 11 case). There is no recognition of the impact of a conversion to (or even originally filing as) a chapter 7 liquidation.

Re: Bankruptcy, not bailout, is the right answer

A slight tangent, but some other suggestions and commentary from WSJ today.
http://online.wsj.com/article/SB122273257698488295.html

The best part is their observation that Congress "can't even make sausage."