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Frank J. Constantino
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Mr. Frank J. Constantino, of Beckley, W.Va., is an educated private investor with 15 years of experience. Constantino follows the financial markets closely and provides opinion through Seeking Alpha. He was recently named in the "Who's Who of Wall Street" by Wall Street Economists for... More
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  • BUFFETT HITS IT DEAD ON THE NAIL - During Times of Great Distress Only Government Can Help


    During Times of Great Distress Only Government Can Help


    November 17, 2010

    BECKLEY, W.Va. - I was starkly reminded this morning of the grave days of September 2008.  As I read this morning's New York Times, I read an opinion piece written by my professional role model, Warren E. Buffett.  This letter was thanking Uncle Sam for saving the world economy in late 2008.  Mr. Buffett reminded me of those extremely dark days in 2008. I sat up many late nights watching CNBC as the largest crisis in generations unfolded on live television. This was a crisis like none had seen since my grandparents lived through the Great Depression.  The evening Lehman Brothers failed most people did not grasp the gravitas of what was happening, nor should they have been expected to.

    Two years later we are able to look back on the actions the United States government took to stem the crisis.  As expected we all criticize aspects of the massive financial rescue. And I am thankful we are able to.  For sure the criticism recently has been escalating, as unemployment is still high and deficits loom large.  However, as we criticize let us not forget.

    In early 2008, when Bear Stearns essentially failed, I realized the system was no longer sound. Fast forward then to September of that year it became clear that Lehman Brothers would not survive. We were worried that insurance giant AIG would fail and I realized the situation was far graver than originally perceived.  Confidence in our banking system had ceased to exist. Likewise, businesses you and I depend on daily could no longer obtain short-term funding to continue operating.  It became crystal clear within days the entire market system that we know and love would fail.

    It is easier today to look back and think that we should have let the free market system work.  Let me tell you it could not work.  The free market system depends on cash, much of which is provided by short-term funding. When in true crisis, as we were, cash ceases to flow.  And cease it did as lenders and companies held on to every last dime they had.

    Had the government, including then Treasury secretary Paulson, Federal Reserve Chairman Ben Bernanke, and President Bush, not acted fast to provide a financial backstop like none the world had ever seen the world would indeed be a different place today.  Our retirement, bank accounts, wages, and jobs hung delicately in the balance.

    So yes it is our right, maybe our duty, to review and criticize all government actions; just remember in times of the greatest distress there is one government the world turns to for help. That is the United States government.

    Real world investor feedback provided by: Frank J. Constantino

    About Author

    Mr. Frank J. Constantino, of Beckley, W.Va., is an educated private investor with 14 years of experience. Constantino follows the financial and business industries closely and provides solid public opinion through social media. Visit his financial connoisseur Facebook page for trends and stories he is following: or email him for additional commentary at

    Disclosure: "No Positions"
    Nov 18 2:30 AM | Link | Comment!
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