Mike Macgirvin
Diary and Other Rantings
   
Friday, Nov 21 2008, 11:46 pm
Sep 25, 2008
Bush's Bailout Speech

According to Bush -

"The government is the only institution patient enough to buy these assets at their current low prices and hold them until their prices return to normal".

Hmmm. I have to question this plan then. There are a lot of investors out there who would gladly buy assets guaranteeing a return in ten or even twenty years - sometimes thirty.

What this says is that the downturn is likely to have negative effects for the next thirty years or more - and/or that there's a high probability these 'assets' will never return to normal. Otherwise investors would be jumping all over them. Several banking institutions are bankrupt for good reason.

I also question the U.S. government buying public stock after announcing their intention to do so. Right. The smart inverstors will have bought these stocks for a nickel on the dollar and wait for the government to buy in and bid up the price - and then quickly exit the market at a huge profit and leaving the taxpayer holding the loss. That's the way the market works my friend.

Better to just sit this one out folks.

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