Wednesday, October 01, 2008

Dow Jones, FDIC and the Bailout


Some interesting commentary in today’s WSJ on the $700 Billion Dollar Bailout. Once again I refer back to the Main Street vs. Wall Street debate. James B Stewart writes an article that I basically agree with. He states that although he doesn’t like the Bill he supports it as doing nothing is far worse then doing it. He talks about the anger coming from Middle America against the package:

“I don’t believe anyone should be bailed out”

“Let overextended banks fail”

Both from Letter are to the editor in the WSJ. He raises an excellent point about revenge being the main driver of this rage. Rather then thinking about what is best for the economy (understandable) or the American people, they seem to be looking to extract as much pain as possible on the banks. Unfortunately it rolls back on the people in one way or another.

Look at the story of Grace Pace. Her husband invested in a local bank many years ago. Through the many mergers that have occurred she ended up with Wachovia shares. For her retirement years she has relied on 1/3 of her income coming from dividends from these shares. Now there is no thing. She is understandable distraught and I am afraid that this story is playing out all across the country. Quite frequently these shares are accumulated over years and reluctantly sold as ownership is seen as a source of pride for many people. This pride is costing many Americans dearly. We cannot go back, but we can attempt to fix the problem going forward to help alleviate the problem. This Bailout Bill, coupled with an increase in FDIC insurance from 100,000 usd to 250,000 usd (?) could provide stability to the markets.

Here are the Stories


BAILOUT UNPOPULAR

GRACE PACE

Good Luck and Good Currecny Trading

Labels:

0 Comments:

Post a Comment

Subscribe to Post Comments [Atom]

<< Home