Congress, what a bunch of morons. God save us from these idiots, please.

You know what bill I would have supported? The following would get my vote YES:

1) USA takes the bad debt from financial institutions AT MARKET RATES, and receives in exchange dollar-for-dollar amounts of preferred stock in each respective institution. This special preferred stock is SENIOR to existing common and preferred shareholders AND bondholders in those financial institutions. And this special stock must be convertible into common stock.
2) The institutions will now still be very undercapitalized, so the US government recapitalizes them in a separate transaction that infuses hundreds of billions of capital in exchange this special senior preferred shares. Existing shareholders in those financial institutions must take a first tier loss equal in part to the influx of government cash and all dividends are suspended. Most of the existing shareholders in these financial institutions will see their shares get wiped out, which is the right thing.
3) The bondholders cannot escape pain either. All other debt, bonds, unsecured debt, that is held by the banks (that is not passed into government hands) is now converted to common stock. This is another key part of recapitalizing the banks, bringing their capital ratios into the acceptable and stable range.
4) Too much re-capitalization is a BAD THING in an economy in recession where the shadow banking system and the need fot it is nearly gone. So triage is an important part. We cannot save ALL the troubled financial institutions when the financial market is no longer is large enough to support all of them. We save the strongest financial institutions, which might be half of those asking for trouble.
5) Plan includes some of the larger international financial institutions, which are also in trouble, such as UBS…etc.
6) NO CAP on CEO pay because we need quality management run each of these re-capitalized financial institutions. The new CEO’s get substantial options that pay off if they turn around these financial institutions in five years or less.
7) The economy would still be in trouble unless the burdensome debt is written down: this means the US government, which is now the world’s largest mortgage holder must re-write the mortgages in line with current housing values, which will keep homeowners from abandoning homes and will keep them paying their mortgages.
8) TOTAL REFORM of regulation of banking. Time to actually start regulating as we should have done to prevent this mess from happening. Must also regulate away the shadow banking economy. Investment bankers now work for banks or they don’t work at all. Mortgage underwriters work for regulated banks or they don’t issue any mortgages. Broker-dealers, hedge funds, others ALL get regulated like banks because they are similar to banks and pose similar risks to our economy.

This plan will NEVER even be put onto the table within congress because Paulson and all his friends will lose hundreds of millions each in stock and bonds they hold in these bankrupt financial institutions.