The Feds New Role: SugarDaddy

September 17, 2008

Since when do we rely on government to intervene in every case of a failing business? If anyone wonders why we have such a mess on our hands, look no further than our boneheaded government that has obviously forgotten its way.  Think of this week’s action within the financial markets is a result, not the cause of our problems.

AIG (AIG) is in a battle for its very existence, Merrill (MER) has been absorbed and Lehman (LEH) is bankrupt. And it is only Tuesday. What’s next?

These days, many people are wondering what our government will do to stop the insanity. Yet, in a capitalistic society that relies on a free market system, we should only look to the government to guide and regulate against fraud and the manipulation of the system. Sometimes known as a laissez-faire philosophy, the government has a role, but it is not to be a business partner and a sugardaddy there to provide a backstop to the bad business practices of the banking system.

Read the full article HERE…

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Written by Andrew Horowitz · Filed Under Economy, Markets, Stocks 

Comments

6 Responses to “The Feds New Role: SugarDaddy”

  1. Neil Catapano on September 17th, 2008 1:31 pm

    Um, the Fed is not the government, it is a private bank.

  2. John Williams on September 17th, 2008 3:22 pm

    You refer to our boneheaded government…. I agree with you, but is it the fault of Bush? or congress? I just don’t know, what do you think may change if Obama gets elected?

  3. Stan on September 17th, 2008 7:39 pm

    Correct. The Fed is not a part of government. How come they get to spend our money. I’ve noticed they’ve all been referred to as a FED bailout. Let’s call it what it is: The American Taxpayer Loan Corporation.

  4. Jon Lawson on September 18th, 2008 2:02 pm

    UK bans ANY short selling of financial firms. UNFRICKIN BELIEVABLE. Why don’t we just close the markets like Russia. This is a staggaring development.

    disgusting. And I even got long at SPY 114.

  5. Sam on September 19th, 2008 12:05 pm

    Andrew (or others),

    I’m confused by this mess (can you blame me?). If government bailouts are not the answer, what is? And a related question — do bailouts help shareholders/investors at all, or is it really the big guys who get helped?

    Thanks,
    Sam

  6. Andrew Horowitz on September 19th, 2008 4:42 pm

    Sam:

    We are all confused…..

    The bailout is a mess and it is a direct assault on free markets… sad day.

    Big guy helped… monumental level of moral risk just got served up
    A

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