Bracing against the wind  

Tuesday, September 30, 2008

Wall St. Doesn't Need Bailout

After a few banks who made bad loans crumbled (after all, foreclosing isn't easy, and lenders should be more cautious), investors seemed to absorb the news by frantically selling off everything Monday (9% overall drop), and then buying up a bunch of stocks on Tuesday (MSFT up 6% for example).

So... smart investors are buying stocks whose gains aren't pinned to low-interest real-estate lending and certain commodities. Why is the U.S. government frantic to *stop* this reinvestment strategy? Are they afraid it might work?

Despite what some may think, our economy is not predicated on cheap real estate loans. If real-estate credit costs go up, there are other avenues of innovation and growth that can be banked on. The market seems to know this. It's unfortunate that our nations leaders don't.

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