Quote:
Originally Posted by Slava
That makes sense, but there are a lot of factors here. One in particular is that while the US bailout is set and approved there are issues in Europe to be worked through. I think that the bailout was a necessity and will help things more than indicated here.
The silver lining to this is that there are a lot of extremely stable companies that are falling in this mess. When liquidity is an issue, good companies get sold. If you have some cash right now it wouldn't be a bad time to put that to work for the recovery to begin in early 2009.
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I would tend to agree with this assessment. The bailout isn't and shouldn't be regarded as a fix to this mess. What it does is put the economy in a better position to recover by helping to free up credit. I would highly recommend that everyone watch the interview with Warren Buffett found here:
http://www.charlierose.com/shows/200...n-with-warren-
He does a pretty good job of summarizing what's going on and what could be expected in the future. Right now everyone is afraid (and not wrongly so), so they're looking for the safest place to secure their money. That will eventually change, but in the short-term, this bailout really doesn't do anything to fix that. The true issue here is a loss of confidence; only when confidence in the banking system returns will this mess start to turn around. The bailout is probably the first step in the direction of returning that confidence.