Well, Its been sometime since i wrote here. And my last post is still pending vis a vis its execution... Anyway nowadays whenever i read news i find words like those in the heading. And that makes me wonder.. :-) ... What is it that's actually happening. The most interesting phrase that i keep remembering with respect to the crisis in US is - " Privatisation of profit and socialization of losses". it sounds good... :-) ... When the sub-prime crisis had just come into light, I read an article somewhere. It equated the situation to socialism. The writer argued, that when all is said and done, there are going to be homes left over, which are going to be a lot cheaper that they originally were. There are going to be people with homes and the loans written off or reduced. I felt that it was actually true. And in the present situation it seems even more apt(I think the article was Swaminomics TOI). The government is going to take over loans that cant be repayed. Thus taking money from the public and redistributing it to those who dont have it. It is better than socialism i think. Where else will we be able to determine so well the needy(if we can disregard the small but unavoidable number of purposeful defaulters).
Further, when the US senate refused to pass the bailout bill, my news alert told me that 1.2 trillion were wiped out in about 6 hours. That sounds like a good number. And its bigger than the figure that was supposed to come for the rescue. What it tells me is that markets run on emotions, because the market has lost that much money and is still alive.. :-) ... Should the reinvestment of the same not bring up the market(but of course people are not going to be buying the useless mortgages now, only a goverment would do that). But if we just go with principle. Lets privatise the losses. Some companies go down. And stay that way so that people wont make the same mistakes twice. Of course i am noone to talk economics. But there is a simple fact that hard cash cant grow. So it is going to be invested back. And thats going to be more than the amount thats slated for the bailout. Let me see how its going to turn out. If u know why this wont work. U can comment below... :-)
Further, when the US senate refused to pass the bailout bill, my news alert told me that 1.2 trillion were wiped out in about 6 hours. That sounds like a good number. And its bigger than the figure that was supposed to come for the rescue. What it tells me is that markets run on emotions, because the market has lost that much money and is still alive.. :-) ... Should the reinvestment of the same not bring up the market(but of course people are not going to be buying the useless mortgages now, only a goverment would do that). But if we just go with principle. Lets privatise the losses. Some companies go down. And stay that way so that people wont make the same mistakes twice. Of course i am noone to talk economics. But there is a simple fact that hard cash cant grow. So it is going to be invested back. And thats going to be more than the amount thats slated for the bailout. Let me see how its going to turn out. If u know why this wont work. U can comment below... :-)
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