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AlbertJayNock

The Stock Market And The Bailout

All three major indices closed up today. So did my trading portfolio and my IRA. Most experts believe it was because of the proposed bailout of the financial markets.

It's good to be thankful for small blessings, but I'm not sure that this is unalloyed good news. The rise  seems a little artificial, since it is because of the bailout.

I haven't formed a firm opinion about whether or not the bailout is a good thing because the underlying issues are very complex and there's an awful lot of noise in the discussion. What I do know is that given the complexity and confusion here, the clamor to "pass this now" is not a good thing. If we are going pass a bill to spend $700 billion dollars of the taxpayers money, a generous discussion period is in order.

I listened to some of Bush's speech last night and was not persuaded of the urgency. Among his remarks were the following:

More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet.



Bank failures would be bad. He doesn't say how many. Yes, the stock market could drop some more. That happens sometimes. Part of our problem is the unwillingness of the Fed to let the stock market fall.  And I don't care if the value of my IRA falls NOW. I would rather it reach a natural bottom so it could move back up later. Same with my home.

The bailout might be a good idea. Some have even argued that it is not a bailout.  But damnit, let's put some time and thought into something this big.

Comments

I know I am being silly; but something about this whole situation makes me think of Atlas Shrugged