bowman711

Daily Market Outlook: Early Indications Are for a Modest Rebound

Beetle, and there isn't a 'bailout' called tax deductions for corporations? Why not treat both individuals and financial companies the same?

Daily Market Outlook: Early Indications Are for a Modest Rebound

My question is, why would all the money governments around the world can print encourage prudent lending? I can see how it might encourage reckless lending because the lender can 'bank' on the government to bail him out when the loans go bad. But, how does reckless lending (even if there happen to be some wise loans as well) solve the financial crisis problem?

I think most would agree that one learns more, and makes greater improvements to one stock trading, from losing trades than from profitable trades. Where would you be today if the government bailed you out every time you had a losing trade? Would you put the same care and analysis to your trades if you knew a bailout would be there if it went bad?

Similarly, how does it really improve the financial condition of these banks and investment banks when they can now count on a bailout for their bad investments? On top of that, there will be essentially the same executives making investment decision now as there were before this 'Mother of all Bailouts.' So, it seems to me we have the same incompetent executives making investment/loan decisions; only now they are assured of a rescue for their losses.

What the Government is doing today regarding the 'Mother of all Bailouts' may delay the real improvements needed in the wisom and prudence of the financial executives, but it doesn't address them. It seems to me that it would be far better for the government to cover the losses of million investers (whether directly as a trader, or indirectly, as owner of a mutual fund, pension fund, etc.) and let the reckless executives and ther financial firms they run get what they deserve.

It simply does not make sense to me for the Government to cover the recklessness of the wealthiest slice of our society, and let the regular people, voters, take their losses on their own.