The Wall Street Kid

I now have a video game created about me call The Wall Street Kid. The mission of this game is to go around and put seed money into commercial banks that are about to get shorted to extinction. In exchange for saving these banks you are rewarded with warrants, options, and preferred stock at deep discounts. In the end you reap millions of dollars in profit because your cost basis is basically nothing while saturating the total outstanding shares by 10%. The more you saturate the shareholder's value you are rewarded with larger yearly bonuses.

The government has announced the $700 billion bailout details. Here is one actual piece of action that will be incorporated into the bill.

The government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in recipients' future profit.

Now I may be young, but I am far from stupid. If you are issuing stock warrants (which tend to be deeply discounted), to the government to provide a bailout program to those banks that choose to participate you are essentially diluting the overall value of the shareholder's equity. So if and when these struggling banks begin to turn profitable one day, the government will be sitting on the sidelines and slowly selling stock back to the open market to the tune of $700 billion dollars. 

A better solution would be delivering immediate relief to the taxpayers who were hurt by these large banking failures. Perhaps raising the the amount of money you can put into an IRA or a 401k plan to $10,000 and $25,000 respectivly. Also, raising  the yearly limits on capital losses from $3,000 to $25,000 per year. These are very simple tweaks that will allow the honest shareholders immediate relief in their pockets. 

Baby trader is furious that this is going to affect his future and you should too. Please free feel to leave a comment beneath this article. I am curious as to what my readers think about this. Also, share my blog with those who would find this blog of interest. I really would like to meet Jim Kramer in person one day.

Ryan :)