The Federal Reserve Is Using Taxpayer's Money To Buy A Bunch Of Bear Stearns Traders Maseratis
No regular reader of this blog is likely to have failed to notice my deep admiration of Jim Rogers. Not only is he one of the most successful investors of all time, becoming rich first in his partnership with George Soros in the Quantum fund in the 1970s and then correctly calling in late 1998 for the start of the commodity price boom just a few months before it actually started in early 1999. And in the recent year, he has made the really good moves of selling shares of Wall Street investment bankers short while buying commodities in general and food commodities in particular. In short, he has been as right as you could get. The only thing he is bad at in this aspect is by his own insistent admission short-term market timing, but that have certainly not prevented him from becoming one of the most successful investors of all times. And as if that weren't enough, he is one of the sharpest analysts of current events around. And he expresses this correct analysis in a very straight-forward easy to understand way and doesn't bother to modify his wording to be polite or diplomatic. Case in point is his latest Bloomberg News interview, in this case by phone. I especially liked his very, shall we say straight forward way of explaining what the Fed bailout of Bear Stearns means
"The Federal Reserve is using taxpayer's money to buy a bunch of Bear Stearns traders Maseratis"
He points out that in January, just weeks before its collapse, Bear Stearns paid out billions in bonuses(!), you know to reward them for having made the mistakes that caused their company to ultimately collapse and for causing massive losses for the U.S. economy. But thanks to the Fed bailout, that reward is not in jeopardy, translating in effect to what this quote said. Rogers also notes that he has been waiting for an opportunity to get out of all his U.S. dollar assets during a briefly lived U.S. dollar rally. But now he realizes that he might again be taking losses from his one weakness, short-term market timing, as Bernanke seems determined to ensure this rally will never occur. Anyway, here is interview as a whole.
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