Roscat

On Jim Rogers and False Statements

Your article is wrong on several points and here is why:

1. It is not half the population that made these irresponsible investments in housing. The percentage touches 10%, as previously stated elsewhere, from which many were just pure investors.

2. If you save the 10% at the expense of the 90%, you have just entered Socialism and disregarded all the tried and true bankruptcy laws, older than many of us, implemented by our forefathers with a view to re-inventing oneself.

3. Bankruptcies do not imply massive layoffs beyond what have already taken place and what is coming anyway. In bankruptcy, Ch 11 - a la Lehman, the assets are being sold at fire-sale prices to the higher bidder. The operations continue the next day.

4. If we take example from other economies (So, Korea), wage reduction should be applied, not layoffs. A company needs to reduce the fixed cost and be flexible; unlike UBS that just increased base wages to make up for bonus losses.

5. The underlying obligations that banks claim should not be written off at market-rates will need 10-20 years to recover. Thus, it is more than just paper money, it is as if it doesn't matter anyway.

6. There are several manufacturers, banks and other industry companies that would love to pick up assets at reduced prices. These will continue running the businesses and the concentration of power will spread just like diversifying a portfolio.

7. Jim sees more blades of grass on his farm because he has seen both farms in person, and probably many more farms than many of us will see in a lifetime (read more about him).

We should all be lucky like that.

Regards.