Monday, November 10, 2008

A Doubt about Reasonable Grounds for Bailout Money-2

          Well..at this moment I have no other choice but to say that so-called bailout money worked, but, still, I can't agree with the review that the revival of US economy(someone might not accept the term, revival yet) results from the bailout money.
          Why? In fact, when the relief money was passed in the congress and released to the market, the situation of it wasn't good and didn't rise as many expected by the effect of the bill of the bailout money. yes, the efficacy of the planned money was mostly a failure.
          During the first week after the release of the money, the economic situantion was still bad(in fact, it was terrible because the depression of US economy started to affect to the world market, of course, in a bad way. And, the money in the US stock market was still decreasing, making the situatino of the market worse.
          However, one thing about the bailout money was successful; the reaction of other major countries. They, including German, France, Great Britain, Japan, started to intervene their domestic market, decreasing the untrustworthy loans and coporation stocks.
          And finally, by the 'involuntary' cooperation of those countries managed to stop further meltdown of world economy. he only one role that the bailout money took part was this; to show the US government's strong will to intervene the market so that it can stop further economic crisis, not the original goal which is to revive the market, facilitating the flow of currency.
          What about the reactions of the most famous investors in US? Well, Warren Buffet was in favor of the bailout. But you should know that he lost nearly a quarter of his wealth through the economic crisis, and he was one of the major people who would get benefit through the bailout money plan.
nbsp         In contrast, George Soros disagreed with the planned money. But in fact it was not beacuse he really considered the ineffectiveness of the money, but because he knew that his hedge fund coporatinos would not be able to act nimbly due to the reinforced government intervention on market.
&          Anyway, in my own opinion, I still think bailout money plan was not the 'best' nor the 'recommendable' choice to support the US market. Of course, I don't know much about Economics, but I believe that the crisis was triggered by some foolish Wall street investors and government officials(including Paulson!!) and they didn't make any effort to take their responsibilities. It's wrong. Moreover, I've heard a lot of other alternatives to evacuate the economy, though they were too difficult for me to understand.
          One thing we got understand and should remember from this crisis is this; Always stick to the basic principles of invest and take the responsibility from what you do by yourself.


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