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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 455.37+3.1%4:00 PM EST

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To: TobagoJack who wrote (40491)9/28/2008 8:04:03 PM
From: prosperous1 Recommendation  Read Replies (3) of 220063
 
TJ
- Many expect bailout to push stock markets up based on Media reports, they may go up some, the charts and fundamentals are saying the opposite; I see NASDAQ headed for a 25% haircut but I have been wrong before
- The govt still does not want to come out clean and discuss openly what the risks for bailout, that is, in what ways it can fail so people can appreciate that this is a best effort and not a guarantee that it will work
- If we assume for a moment that the bailout worked: that is financial markets are liquid again, stocks hold value, houses hold value, and no significant job losses and back to golden age of capitalism; what is the lesson from this exercise?
A. its OK to speculate and make lot of money using every loophole available
B. it takes a while for bubble to burst and your govt will deny its existence until it needs public support for a solution
C. when s&*% hits the fan the govt will rescue using bailout which also works
D. its OK to make a bigger bubble than the last time since the bubbles are bailable
E. bubbles can be creates and rescued in any sector

If these are the lessons, why would we not create larger bubbles with more speculation since they work? if these conclusions are not true, we are looking at failure of the bailout in its face the only question being in what way and how many ways it can fail and how fast? the public needs to understand this if they have to protect any of their future....somehow I don't think the bailout will+should work because of the moral hazard of the type it creates; the question then being what type of pain we are going to see until unwinding is complete, unfortunately, when we get a new admin it will have all the pressure from citizens to solve the crisis without owning any of the responsibility toward the problem and they will try everything under the sun in their bailout research 101 class:-)
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