answer this my friends please, page-15

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    "if the US govt takes x amount common stocks in these banks, the benefits down the track when they sell it back to shareholders will be a win win for the government ????"

    That will depend on the value the govt buys the common stocks at.

    Say, a bank was "worth" $10b before GFC, post GFC the market prices that bank at $2b the govt should buy over the bank at $2b (thus the bank shareholders take a haircut), not at a value that the bank says it is "worth" which will likely to be between $10b and $2b.

    Post takeover a few years down the track, with govt backing, the bank is nurtured back to health and the govt sells it back to the public for a sum higher than $2b and make a nice profit for taxpayers.

    That is my simple way of looking at it, but in reality it does not happen that way :-)

 
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