A looney, volatile week in the markets fueled by government intervention and artificial supports for financial firms and stock prices.
We scan the globe for signs of intelligent life in our, "Features of the week".
1. US drafts sweeping plan to fight crisis. Treasury announces plan to buy worthless mortgage paper.
2. SEC issues temporary ban on short-selling of 799 financial stocks.
Just following the FSA's lead, I guess.
Note: Once again, we bring you Doug Kass' comments on the short-seller blame game. Plus, BMB's comments on "Kill Shorty".
3. Buffett's derivatives "time bomb" goes off on Wall Street.
4. Strong push for an RTC-type solution to the credit crisis.
Note: Jim Puplava and others at Financial Sense Online saw this type of Resolution Trust solution to the mortgage debt crisis coming.
5. Stocks soar worldwide following bank bailouts, short-sale restrictions.
6. "Is Capitalism Dead?", asks Minyanville's Todd Harrison.
7. Nouriel Roubini on, "The transformation of the USA into the USSRA".
8. Hedgie Fintag has some thoughts on the US and the markets.
9. Warren Buffett may find bargains in the AIG rummage sale.
10. Assets linked to emerging markets will become "toxic waste".
11. Sue them, jail them, make them pay for meltdown: Ann Woolner.
12. Gold coins & bullion sales up as investors seek shelter from crisis.
13. Wall Street's ills seep into everyday lives.
14. Charles Kirk knows that bailouts are band-aids.
Thanks for reading Finance Trends Matter.
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Friday, September 19, 2008
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2 comments:
Businesses lose money and go bankrupt every day. Wasteful enterprises need to go bankrupt- our modern, wealthy lives are possible only because markets redirect wealth from less productive enterprises to more productive ones.
If unsuccessful entrepreneurs were punished for making losses, successful entrepreneurs – and our economy – would be destroyed as well. The real criminals are the politicians forcing you to pay for the market’s mistakes. Unfortunately, people like Ann Woolner are only encouraging them to continue to rob us – and cripple the market.
Hi HL,
I absolutely agree with what you've said on the role of bankruptcy and liquidation in a market system. I've been saying the same thing here and adding commentary from Jim Rogers, Nouriel Roubini, and many others backing up this point.
Also, I see your point on the Woolner article. I have included this piece here because it's interesting to note that there hasn't really been much public outrage over the recent bailouts and the executive compensation tied to some of the more notable business failures. I think this piece may be an early indicator or some of the sentiment that might bubble up in the near future.
I agree that if society (through government courts or similar means) were to impose punishment on entrepreneurs and executives simply for suffering losses or making bad decisions/mistakes, this would indeed be a horrible thing.
Still, I think the anger that I'm hearing from people is largely directed at the execs (many of whom are more professional corporate managers than true entrepreneurs) who have lied about their companies' financial health and accounting statements, acted irresponsibly, led their companies to failure, and still walked away with their salary and bonuses intact.
When you add taxpayer and debt-funded bailouts (for these very companies and their execs) to this mix, it's enough to make some people's blood boil.
I'm not much of an expert on corporate governance and compensation issues. Maybe problems with irresponsible execs and boards of directors should be combatted through concerted shareholder action? Any thoughts?
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