21 July 2008

Hurt

"...ours is a free-market system. More and more, our version of free markets holds that they are free only when asset values rise. When they fall, the markets must be managed." [From NY Times]
and from The American Prospect (thanks to a post at Marginal Revolution)...
"The decision to intervene against short-selling is completely inconsistent with the belief in the wisdom of the markets. Of course short-sellers can be wrong and depress stock prices more than is justified by fundamentals, but so what? The government doesn't intervene when it thinks investors have exaggerated the true value of a stock. The public has no more reason to fear under-valued stock prices than over-valued stock prices."
Growth, growth, growth. The government, business people, nearly everybody wants everything to be good all the time. But it just cannot be so. It seems like nearly everybody has forgotten about the fact that there is absolutely a business cycle that brings good times and bad times. And although we don't have to accept the bad times with no resistance or efforts to minimize the negative effects, we do need to accept the reality of the situation. Things will be tough for a while. Tough shit. Deal with it. Bailouts of Bear Stearns and potentially FannieMae and FreddieMac. Limiting short-selling by the SEC. Cutting the Federal Funds Rate drastically. We're doing everything we can to keep from hurting now. But eventually we will have to hurt. People either don't realize this or are very good at suppressing it...and it's just flat out amazing.

No comments: