Can't Touch That & Buffet's Bailouts
From Flecks latest; and sounding very Naybobish:
"the intensity of the credit crisis has distracted folks from the economic crisis, the brutal recession we are destined to experience.
The legislation is not going to change that fact.
They said that if this bill didn't pass, we would experience turmoil and chaos, the implication being that if the bill did pass, we wouldn't have much trouble.
That is an absurdity, brought to you by the folks who maintained that the problem was just subprime, contained, etc.,
and who still do not understand the environment. Turmoil and chaos were preordained once the credit and real-estate bubble was allowed to go on for so long.
In the misconception department, folks have heralded Warren Buffett's investment in General Electric (GE, news, msgs),
similar to the one he made in Goldman Sachs (GS, news, msgs), as something akin to a vote of confidence. It's actually quite the opposite.
What he's doing is making the most senior equity investment that he can via preferred stock, and getting paid quite a large coupon to do so, with call options thrown in.
Buying the common stock would be a vote of confidence. This is an investment you make when you're still worried about lots of damage yet to play out."
"the intensity of the credit crisis has distracted folks from the economic crisis, the brutal recession we are destined to experience.
The legislation is not going to change that fact.
They said that if this bill didn't pass, we would experience turmoil and chaos, the implication being that if the bill did pass, we wouldn't have much trouble.
That is an absurdity, brought to you by the folks who maintained that the problem was just subprime, contained, etc.,
and who still do not understand the environment. Turmoil and chaos were preordained once the credit and real-estate bubble was allowed to go on for so long.
In the misconception department, folks have heralded Warren Buffett's investment in General Electric (GE, news, msgs),
similar to the one he made in Goldman Sachs (GS, news, msgs), as something akin to a vote of confidence. It's actually quite the opposite.
What he's doing is making the most senior equity investment that he can via preferred stock, and getting paid quite a large coupon to do so, with call options thrown in.
Buying the common stock would be a vote of confidence. This is an investment you make when you're still worried about lots of damage yet to play out."
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