gurby

Read It and Weep for the USA

Ironically this plan is exactly what the competitors of America wanted to see. If this is an economic war, America has strategically taken the steps towards losing everything it has build up on history. Saddle the drug the country to on extreme levels of debt that it can never pay back and then watch its systematic fall.

America had the competitive edge with Europe and China, precisely because of its investment banking. America can fund futuristic technology better then any other country because of it far sighted investment banks. So the first attack was launched on investment banks by drugging then with cheap returns and taking extreme bets with instruments they all did not understand.

The second step is get the Govt to commit to saving all Americans and corporations, although technically impossible, by bailing out and getting saddled with debt that will take several generations to pay if the mortgages assets continue to correct another 20 percent.

What is needed is a return of the equity rescue by investors who need to be confident that the US govt will not interfer by wiping out equity. Reality is no amount of bailout or loan can save this country. Only equity have the scale to rescue this country. So what is needed is confidence that the capitalist system must be respected and regulated fair play

Good luck and God Bless

Fannie & Freddie Bailout? - Fast Money Recap (9/5/08)

The biggest mistake of Corporate America will be to wipe out common shareholder value. Investors and not financial institution are the real markets.

Once people who are the ultimate investors lose confidence in the capitalist system we can kiss good buy to solving the financial crisis, mortgage crisis, and the US dollars.

It is amazing how this basic understanding eludes even Alan Greenspan and the presidential candidates. They have this false illusion that the FED plan may benefit shareholders. In fact, shareholders are the ones that could potential protect the taxpayers from monumental losses.

All I can say is good luck to corporate America if there is even the slightest whiff that the plan would entail shareholders losing close to everything.