Thursday, May 13, 2010

Greed is Good

Well, greedy seems to be good for you wallet - until the next implosion. Pragmatic Capitalist did a better job saying something I tried to convey in this morning's Quick Takes Pro. Here it is, copied from the Seeking Alpha website:
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So that’s all it takes these days to sweep a good crisis under the rug – cut a nice big check to all the people who made the bad decisions that caused the crisis. In no time we erase a few weeks worth of stock market losses. Government has everyone’s back. No one fails. There are no losers in this market. No risk. You truly can’t lose. You could buy the very worst debt on the planet and governments will make sure you remain whole. What a deal. It’s capitalism turned on its head.

Equity investors are clearly catching onto this trend and snatching up stocks with total disregard for any risk. And why shouldn’t they? After all, government will bail them out when everything goes haywire. It’s almost a guarantee these days.

In fact, the sad thing here is that you’re almost better off causing the next big meltdown. It goes like this – ramp up risk, make huge profits on the way up, record bonuses for everyone and then when it all goes bust you take none of the losses. Instead, the government takes the loss, you get bailed out and you start the whole game over again! Sounds fantastic doesn’t it? That’s what our stock market can be boiled down to these days. I’ve never seen anything like it. It’s great for all the gamblers. And horrible for all the regular joes.

The can’t lose market is back. Buy something. Anything! Who cares. It’s all on sale even if it’s not. And when it goes bust you’ll get a brand new model courtesy of Government Inc!

1 comment:

paulocuana said...

People wonder why everyone is angry.
It's socialism for the bondholders and strict capitalist austerity for the workers.

When these Greek Bonds were purchased did anyone think that they might yield more because there was more risk?

Greece should let the bonds default and pull out of the Euro.

Paul O'Cuana