Monday, October 06, 2008

Bailout Fail To Calm Markets

As you may have noticed there have been a massive sell-off in stocks globally today. The cause? Supposedly the news that the bailout for German property lender Hypo Real Estate was briefly imperiled during the weekend but is now back in place. So in other words, despite the bailout, stocks still crashed.

Of course, it could be maintained that without a bailout the crash would have been even bigger. And there is probably some truth in that (at least with regard to the short-term), but it seems clear that governments using their current methods are unable to prevent a significant downturn.


Blogger John Maszka said...

This bailout is just one more example of the indivisible handjob stroking irresponsible CEOs and CFOs with billions so that they can run the American economy even further into the ground. So much for Keynesian economics. If the goal is to stimulate the economy, why not give the money directly to the American taxpayer? A bird in the hand is worth two in the bush administration.

9:45 PM  
Anonymous Anonymous said...

Deposit insuances could very well have the effect that people flee the stock market and prefer bank deposits instead of the volatile stock market.

If the prices of stock fall that probably has the same effect as a drop in the money supply.

11:07 PM  

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