rd4sndk

Paulson's Plan Fails to Understand the Problem; Madoff Is a Perfect Example

James... I see your point but I have less faith in your fix and Obamas than I have in Paulson's. Can you answer me this? How is rebuilding a road that is already built will improve real money creation? I can see how it provides jobs for people but the money for those jobs comes from those who are working thus reducing on one hand money supply and increasing on the other. The new roads are not going to make it more efficient to ride on them although it would improve the comfort level. So I don't even see an effeciency component to your plan.

On the other hand, if Paulson can get the present locked up banking system to restart lending, this lending will lower the cost of capital (improved efficiency) and some of it will make its way into the hands of real money creaters (inventors, manufacturers and the like). It is these people that create new opportunities for money and lower the cost of capital by making better more cost effective products.

I believe we must do both Paulson and your plan but if I had my choice of in which one to emphasis my preference would be Paulson's for the immediate term and rebuilding infrustructure second.

Can you tell me the flaw in this logic?

Dividend Yields Soar

Correct me if I'm wrong but Since you're buying the stock for the div, then why not hedge your stock purchase with some puts? Any errosion in the stock will bet off set by the puts. Any sign of a bull market, you can cover lower your puts and benefit some form the stock appreciation.