Well, there is good news about, or at least better than the utterly dire news we have been getting.
The US government has effectively taken over Fannie Mae and Freddie Mac who cover half the US mortgage market. Although leaving shareholders severely out of pocket, it seems the US government is going to make mortgage cash available helping the US housing market.
Markets around the world have reacted positively to this news. Had either or both of those institutions collapsed things would have been very grim indeed.
Also oil is down, as are raw materials prices leading to lower output figures.
Make no mistake, it will take quite a while for confidence to return to the market, but we may now be moving along the bottom and up again, in terms of confidence.
The BBC has this on the US and this on factory output prices.
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6 comments:
This is one thing I don't understand about so many of my fellow conservatives...why is it a good thing that the government is taking over/bailing out a company? What happened to free-market system? If your business goes down, that the risk in the market. If you can't manage your business or if the market fails, don't use taxpayers dime to rebuild it. That means that there is no risk in big business, that if something goes terribly wrong, then the gov't will be there to make sure you don't go under. Simply put, it privatizes profits and publicizes risks. That not good for anyone.
I don't buy the arguement that so many people are invested, so many mortages are garuanteed by these companies that it would devastate everyone if they went under...blah blah blah. First, mortages, lending, etc. are all risky practices by all parties, taking away those risks is not in anyone's best interest. Second, maybe if we let them fall then there wouldbe more diversity and competition to keep us from relying so heavily on a few huge companies.
I hate government bail-outs, and I don't think it's very conservative to support them.
Broadly I agree government bailouts are wrong, however two things make this different.
Firstly the two institutions involved are financial, and a collapse in the financial system would be bad, secondly this is no free lunch for the investors. Their stake is now worth squat. They let those they entrusted with the business do bad business and so have lost their shirts.
Seems fair enough to me.
I agree that it would do a lot of damage, but that is nature's way of weeding out bad businesses. Even with the gov't requiring new CEO's, it still sends the message to big companies that if you go under then the gov't will bail you out. Financial or not, it's still a bad message.
As far as the invetors, they have a responsibility to check the companies they are putting money into. Plenty of public companies go under all the time and people loose their investment. That's the risk of investing.
Republicans are NOT conservatives.
Republicans support BIG BUSINESS, BIG GOVRENMENT, and BIG DEBT.
The Republican vision is an elitist society with one world government.
Vote for America! Vote Libertarian! Vote for Bob Barr this November!!!
Libertarian and Conservative are different things.
And don't fool yourself...a vote for Barr is a vote for Barack.
Benny, baby, as usual, you haven't got a clue!
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