Dear President Obama,

Please stop pouring taxpayer money into failing banks.

Thanks,
HHL

p.s. : Is it a good idea to take money from taxpayers and use it to prop up insolvent banks so that shareholders of these horribly mismanaged companies don't lose their investments? Isn't this an insult to these investors? Can't we afford them a measure of respect by refusing to question their knowledge, sophistication, and intelligence? Isn't it disrespectful to assume that they are ignorant, or fools, or dupes? Surely investors understand that when they purchase securities there are two possibilities: gain or loss. Presumably they understand that "gain or loss" does not mean "gain". Loss, you see, is also a possible outcome. We can safely assume, I believe, here in America, in the 21st century, that persons who buy stock ("venture", "speculate", "play the market") realize that it is well within the realm of conceivable outcomes that the stock they are purchasing (yes, even a bank!) might decrease in value rather than increase, resulting in a loss, possibly even, in the worst case, a catastrophic loss. We can, surely, attribute this much intelligence and sophistication to such people, right?

p.p.s. : I once made a lot of money investing in a company that was near bankruptcy. It was called American Airlines. As news spread of its near-inevitable insolvency, its stock price tumbled to a verge-of-bankruptcy bargain. This was when I bought it. I speculated (guessed!) that three things needed to happen to save the company: (1) a renegotiation of its union contracts, (2) a forbearance from its major creditors, and (3) a loan from the government. Within two weeks the company announced that it had renegotiated its union contracts, received a forbearance from its major creditors, and accepted a (small, by today's standards) short term loan from the government. A few weeks later its stock was trading at a 6x multiple of its verge-of-bankruptcy price. If any of these three things had failed to happen, the company would be forced into bankruptcy and I would have lost my entire investment. As it happened, the company stayed afloat, the union members kept their jobs (now slightly less lucrative), its creditors were repaid with only a small haircut, the taxpayers got their money back, and everyone was better off. I bought a car. What is the moral of this story? The government should always act to prop up failing businesses. No. I'm kidding. The moral of the story is that if the unions had refused to renegotiate, if the creditors had refused to forbear, or the government had refused to bail out, I would have lost my money, and rightfully so. I would have been upset, disappointed, sad, and so forth. But I would not have been angry. I would not have considered myself a victim, I would not have cursed the government. I would have been poorer, and yet somehow better off with the knowledge that I was foolish to think that I could predict the mysterious and often apparently random workings of capital markets (or unions or creditors or governments, as the case might have been). It could have gone either way, a roll of the dice. It was pure dumb luck with only the slimmest of edges in my favor (I mean, shit, I read the newspapers, thereby becoming an expert analyst of the transportation sector? Please.). So I don't want to hear Citicorp shareholders crying about their lost money and railing against the government for not propping up a disastrously mis-managed enterprise, a company which apparently bought every worthless piece of shit contractual asset that was ever offered to it, that blew billions upon billions in overpayments to its incompetent employees, that fraudulently mis-stated the value of its earnings and its assets by a factor of, well, infinity, apparently, in order to justify even more billions in bonus payments to its fraudulently irresponsible and inept management. They used to have a word for this: embezzlement. So I don't want to hear these shareholders crying. I didn't hear a lot of crying back when the ol' 401(k) was really growing that wealth, baby! Not much crying then. But I heard a lot of speculation on how many square feet the next house would have, or which German luxury car brand would have better resale value, or how a digital projector makes a better home theater than a high-end plasma, or whether St. Bart's might be less touristy than Maui. Those were the days, huh?! That HELOC seemed like it would neeeever run out, right? Better tap the ol' credit line and buy some more bank stock, cuz that shit is just gonna keep on going up! But on second thought, I don't mind the crying. I sympathize. It sucks to lose money. It feels bad, and probably even worse when it's at least partly your own fault. I've lost a lot of money on investments myself. In the gaming sector. In a casino. At a roulette table in Vegas, with a blood alcohol concentration somewhere in the neighborhood of 0.35. Yeah it sucks. They don't bail you out there, either.