Why Paulson's Plan Won't Work

Dear Friends,

Here is a Wall Street Journal video clip of the Interview of David Ranson, (H.C. Wainwright & Co., Economics Inc.), by Simon Constable (Dow Jones Newswires Columnist) where Mr. Ranson explains why he is of the opinion that the Paulson Plan won't work.

In fact, he mentions the current Uncertainties plaguing the markets and the economy, and proposes the idea of Accelerated Bankruptcy, which is in conformance with the concept of Creative Destruction, a term first coined by Schumpeters.

Should the financial institutions that are about to fail be encouraged to fail? According to Mr. Ranson, this is the fastest way for the economy to recover. Does that make sense? Take the pain and move on, OR, fight and minimize the pain.

Be careful what you wish for ..... some wise man once said this. When financial institutions drop like flies hit by a nuclear bomb, will it be too late to regret?

To be, or Not to Be, that is the Question (Shakespeare).

In my opinion the US Authorities have to have a clear understanding of the situation before they can make a final decision. The authorities must be clear that despite the vast resources of the US Government, they cannot save everyone, be it a depositor, a mortgage borrower in trouble, or a financial institution.

Where the authorities draw the line, in terms of what is good for America, will depend on the ROI (Return on Investment), i.e. the cost benefits of a Rescue Plan. The key objective must surely be the most benefit for the least cost. Easier said than done, but unfortunately, this is the ONLY way to spend money wisely, what more in this case, hard earned taxpayers' money.

Best wishes,

Ooi