[A DC lawyer of my acquaintance sends the best analysis of the bailout I’ve seen, and a counter-proposal.]
Taxpayers receive preferred stock and collateral from a bank borrowing from the Taxpayers, both in the full amount of the loan sought by the bank. In other words, stock plus collateral in double the amount of the loan. Taxpayers profit from a bailout before anyone else does.
Thanks to Warren Buffett and Goldman Sachs for the heads-up by disclosing the terms of their deal, which should be the low water mark for any Taxpayer bailout. A higher water mark would be the terms suggested above, which are not uncommon in private equity deals and chapter 11 bailouts.