Bailout (& Inflation) On

There’s a lot of hand-wringing on the cable news about whether House Republicans will back the “new” bailout agreement (which looks an awful lot like the one reached on Thursday) but for those willing to put aside their partisan/ideological bias, it seems safe to say this is a done deal.

House Republicans are supposedly meeting this afternoon to run it by their caucus but I’d put money that they’re meeting to divvy up which vulnerable members get to vote against it to bolster re-election prospects.

The bailout does little to change the underlying fundamentals of the economy and there is growing global recognition that the U.S. has serious problems as this Bloomberg article shows.  Eventually, the stock market must reflect the fundamentals buttressing corporations’ earnings power so I believe Marc Faber’s assertion that a renewed bull market in equities is simply fantasy.  The government’s regular intervention in the markets for well over a year and now with the short-selling ban including companies like IBM and CVS seems to have dried up volume and makes me wary of committing capital.

I will be acting accordingly.  YMMV (please see the disclaimer).

More on this topic (What's this?)
How to Predict an Economic Collapse
Are We Really Headed for Deflation?
Read more on 2008 Financial Crisis, Inflation at Wikinvest

One Response to “Bailout (& Inflation) On”

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