Wednesday, January 21, 2009

TARP on steroids

On the day Obama was inagurated, it did not take long to see the rumblings of more bailouts headed our way.

No- I am not talking about the second $350 billion from TARP that was approved last week for Barack Obama.

No- I am also not talking $850 billion Obama bailout of local and state governments( Obama calls it a stimulus package)

What I am talking about is another bailout of the markets:

“Congress isn’t going to step up and say, ‘Hey, can we give away another
$700 billion?’” said an aide to a second Democratic House member. “But there’s a
growing sense among people who are really watching this closely, I think, that
it is entirely possible, six months from now, maybe even less, the
administration is going to come back and say, ‘We need more; we need ... more of
the same.’”


The first $700 billion is not enough. The second $850 billion will not be enough. Now we are on to the next version of TARP, probably another $700 billion.

It's TARP on steroids.

Then after reading this sneaky little comment in Bloomberg yesterday when they were talking about the largest market drop in American history as a new president was being sworn in, I am more convinced than ever, that we will be bailing out the markets once again in a few months:

“All the banks are going to have to recapitalize,” said Greg Woodard, portfolio
strategist at Manning & Napier Advisors Inc., which manages $16 billion in
Fairport, New York. “That’s not done. That’s in front of them, and we don’t want
to try to get in front of that trade.”

Yep, when they start talking about recapitalizing- I begin wondering how many billion(or is it trillion) dollars we will need.

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