Showing posts with label financial health. Show all posts
Showing posts with label financial health. Show all posts
Sunday, October 7, 2012
Post No. 178a: Why the Presidential Debate Last Week was a Waste of Our Time
Why a waste of time? Because the candidates debated all around the issues that matter. We will not be able to solve problems in this country until we stop doing two things: (a) politicizing discussions simply to appeal to the emotional component of voters; and (b) suggesting that our problems can be addressed by simply implementing Policy A or Policy B.
We previously generated this piece under the title, "If Tin Whistles are Made of Tin, What are Credit Default Swaps Made Of?" We believe that the neglected issues discussed previously (at the height of our financial crisis) in this piece continue to be applicable to our current situation. It's time for us to get busy folks.
© 2009 and 2012, the Institute for Applied Common Sense
There’s a reason the Logistician likes the Laughingman. The Laughingman can reduce crap to its irreducible aroma.
We generally try to avoid taking sides in our discussions. It just doesn’t get us anywhere. No party or ideologue can legitimately lay claim to the concepts Common Sense and Personal Responsibility, both of which we try to weave into each original article posted.
Our goal is to get 95% of the heads nodding. Sometimes we get close. Others times, it’s a reach.
We recently sought topics from you, with the hope that we would all learn something new through the exchange, and take away something of value. Exasperated by all the barking about our economic situation, the Logistician posted the following comment on a number of blogs he frequents. His thoughts jived with the topic suggested by the Laughingman, and thus the title of this piece.
“We as a society, and as individuals, have to take responsibility for where we find ourselves today. By doing so, we might be able to turn this thing around.
“We have a tendency to forget the basic, big picture stuff, and then we complain when things deteriorate.
“Things on planet Earth are actually quite simple. (Gore Vidal once referred to us as the ‘United States of Amnesia.’ Perhaps we’re such a young nation, we haven’t fully learned to appreciate history.) Consider the following:
“1. Innovation and technology, leading to building and creating 'things,' determines EVERYTHING in a civilized society. (If you don't personally know a scientist or inventor in your neighborhood advancing society's interests, or some kid who WANTS TO DO SO, you have a long term problem.
“2. New technology, followed by the production of things using the technology, generates JOBS. The tax revenues derived from those technological enterprises determine what government ultimately can do. No innovation and no production of things - no tax revenues.
“3. The more hours that one works, the more one produces. (Up to a point, of course. We do not want people collapsing from exhaustion.) Exhaustion occurs way beyond 40, or even 60 hours a week for that matter. Take a break, and you run the risk of falling behind your competition.
“4. When a substantial segment of your society has to spend the vast majority of their time to cover the essentials, that segment isn’t particularly useful. It’s no different than the role played by mass agriculture in history. Food production has to be relegated to a few, so that the others can engage in the advancement of innovation and technology, and the trade and exchange of the products produced.
“5. The simplest way to reduce rising health care costs (and thus the health care component of our deficit)? Stop eating Kentucky Fried Chicken, smoking Camels, drinking Colt 45, and hit the treadmill. You'll see a dramatic improvement in health, and at a pretty low cost.
“6. Retirement (when workers still have talent and the ability to contribute) kills your society and generates other problems, especially when you shift tax revenue to people who sit on their asses for years. Capable people who work until the day they die are more productive members of society, physically and mentally. And, they feel that they have some value and stake in society.
“7. War is not a revenue generating enterprise. There are few positive ramifications. It’s a resource drain. It kills productive members of society (who could be inventing some stuff), and gets people pissed off at you.
“8. When you treat any segment of society unfairly, for whatever reason, they become less motivated, and less capable, to work in concert with you to pursue long-term societal interests. It makes more sense to have them voluntarily and emotionally 'buy into' your societal goals. They'll be more motivated .”
If one looks back in history, it’s clear that this is simply Common Sense.
A society which rationalizes its poor choices for too long a period of time is ultimately doomed. It might ride its success for a short period of time, but not for very long.
We, as a society, are ignoring all of the stuff that really matters. We're fooling ourselves while we engage in meaningless debates.
And wasting time.
It's like a boat sinking because of a leak, and the sailors are all arguing, while blowing tin whistles, about who’s responsible for the leak, and what mechanism to use to get the water out of the vessel.
If tin whistles are made of tin, what are credit default swap derivatives made of?
We’d like to know.
We also approached our current problems from a different perspective in another piece entitled, "Pigs Get Fat; Hogs Get Slaughtered." Address the issues raised in these two pieces, and we will be on our way back to fiscal and societal stability.
Saturday, October 11, 2008
Post 53a: Understanding the Word Swaps and their Role in this Financial Mess
Earlier this week, we mentioned that several former CEOs of AIG Insurance testified before the House of Representatives. During the course of that hearing, the interrogating Representatives and the CEO witnesses frequently referred to "swaps" and their risky nature.
It occurred to us that many others might not understand the concept of swaps and the role they played in our financial mess. We thought that more Americans might want to gain a better appreciation of this financial vehicle since there are "$62 trillion in credit-default swap derivatives out there. [Emphasis added.]"
One of our readers recently forwarded a September 27, 2008 article from The New York Times written by Ben Stein, entitled In Financial Food Chains, Little Guys Can't Win. In that article, Stein writes:
"[A]ccording to what I hear from my betters in the world of finance, the most serious problems are not with the bundles of subprime mortgages themselves — a large but not lethal quantum as far as I can tell — but with derivatives contracts tied to subprime and other dicey debt. These contracts are superficially an attempt to “insure” against risks of default, hence the name “credit-default swaps.” In fact, they are an immense wager — which anyone with lots of money or borrowing ability can enter — about how mortgage-backed bonds, leveraged loan bonds, student loan bonds, credit card bonds and the like will perform."
Read the remainder of the article: http://www.nytimes.com/2008/09/28/business/28every.html?_r=1&ei=5070&oref=slogin&emc=eta1&adxnnlx=1223740921-R1il7UykUJKI/O7CnpNPmw&pagewanted=print
It occurred to us that many others might not understand the concept of swaps and the role they played in our financial mess. We thought that more Americans might want to gain a better appreciation of this financial vehicle since there are "$62 trillion in credit-default swap derivatives out there. [Emphasis added.]"
One of our readers recently forwarded a September 27, 2008 article from The New York Times written by Ben Stein, entitled In Financial Food Chains, Little Guys Can't Win. In that article, Stein writes:
"[A]ccording to what I hear from my betters in the world of finance, the most serious problems are not with the bundles of subprime mortgages themselves — a large but not lethal quantum as far as I can tell — but with derivatives contracts tied to subprime and other dicey debt. These contracts are superficially an attempt to “insure” against risks of default, hence the name “credit-default swaps.” In fact, they are an immense wager — which anyone with lots of money or borrowing ability can enter — about how mortgage-backed bonds, leveraged loan bonds, student loan bonds, credit card bonds and the like will perform."
Read the remainder of the article: http://www.nytimes.com/2008/09/28/business/28every.html?_r=1&ei=5070&oref=slogin&emc=eta1&adxnnlx=1223740921-R1il7UykUJKI/O7CnpNPmw&pagewanted=print
Monday, October 6, 2008
Post No. 50a: One of the Better Political Cartoons of the Year
Compliments of Dana Summers of the Orlando Sentinel
http://www.orlandosentinel.com/news/opinion/columnists/orl-summers-cartgallery,0,5845995.photogallery?index=orl-cart-constituents-100208
http://www.orlandosentinel.com/news/opinion/columnists/orl-summers-cartgallery,0,5845995.photogallery?index=orl-cart-constituents-100208
Monday, September 29, 2008
Post No. 49: Finally, Someone Explains Something That We Can Understand
I was fortunate enough to receive a decent education at some decent educational institutions. I also took corporate, business, accounting, banking, finance, and various other management courses.
However, I must be honest. I do not understand even a quarter of what occurred over the past 20 – 30 years to lead to our current financial situation.
Although I am sure that most of us can point to some emotional, conceptual issues, be it outsourcing, illegal immigration, two foreign wars, decreased industrial output, and greed, I just really feel like I am in the minority in terms of understanding investment banks, hedge funds, selling short, bundling, derivatives, and such.
Just last week, I contacted two of my graduate school buddies, one with a specialty in banking, and the other in corporate securities, and I told them that I hoped that they were in the Senate Banking Committee sessions to keep them honest.
One of them, “The Bear” (no relation to the term to describe financial markets), forwarded the following article to us by John P. Hussman, Ph.D. of Hussman Funds, entitled You Can’t Rescue the Financial System If You Can’t Read a Balance Sheet, which was posted by Dr. Hussman earlier today. It provides food for thought.
September 29, 2008
You Can't Rescue the Financial System If You Can't Read a Balance Sheet
John P. Hussman, Ph.D.
All rights reserved and actively enforced.
This is a bad idea.
However the final legislation is written, the Troubled Assets Relief Program (TARP) being rushed through Congress will evidently be built around its single worst provision, which is that the Treasury will have authority to purchase distressed mortgage securities from U.S. financials.
As I noted last week in An Open Letter To Congress Regarding the Current Financial Crisis, the sequence of bankruptcies that we've observed among U.S. financials has been almost exactly in order of their gross leverage (the ratio of total assets to shareholder equity). The reason for that is:
1) as the assets of a financial company lose value, the losses reduce the asset side of the balance sheet, but also reduce shareholder equity on the liability side;
2) as the cushion of shareholder equity becomes thinner, customers begin to make withdrawals;
3) in order to satisfy customer withdrawals, the financial company is forced to liquidate assets at distressed prices, prompting a further reduction in shareholder equity;
4) go back to 1) and continue the vicious cycle until shareholder equity goes negative and the company becomes insolvent.
Let's return to the basic balance sheet of a typical financial company before the writedowns:
To read the remainder, click on: http://www.hussmanfunds.com/wmc/wmc080929.htm.
However, I must be honest. I do not understand even a quarter of what occurred over the past 20 – 30 years to lead to our current financial situation.
Although I am sure that most of us can point to some emotional, conceptual issues, be it outsourcing, illegal immigration, two foreign wars, decreased industrial output, and greed, I just really feel like I am in the minority in terms of understanding investment banks, hedge funds, selling short, bundling, derivatives, and such.
Just last week, I contacted two of my graduate school buddies, one with a specialty in banking, and the other in corporate securities, and I told them that I hoped that they were in the Senate Banking Committee sessions to keep them honest.
One of them, “The Bear” (no relation to the term to describe financial markets), forwarded the following article to us by John P. Hussman, Ph.D. of Hussman Funds, entitled You Can’t Rescue the Financial System If You Can’t Read a Balance Sheet, which was posted by Dr. Hussman earlier today. It provides food for thought.
September 29, 2008
You Can't Rescue the Financial System If You Can't Read a Balance Sheet
John P. Hussman, Ph.D.
All rights reserved and actively enforced.
This is a bad idea.
However the final legislation is written, the Troubled Assets Relief Program (TARP) being rushed through Congress will evidently be built around its single worst provision, which is that the Treasury will have authority to purchase distressed mortgage securities from U.S. financials.
As I noted last week in An Open Letter To Congress Regarding the Current Financial Crisis, the sequence of bankruptcies that we've observed among U.S. financials has been almost exactly in order of their gross leverage (the ratio of total assets to shareholder equity). The reason for that is:
1) as the assets of a financial company lose value, the losses reduce the asset side of the balance sheet, but also reduce shareholder equity on the liability side;
2) as the cushion of shareholder equity becomes thinner, customers begin to make withdrawals;
3) in order to satisfy customer withdrawals, the financial company is forced to liquidate assets at distressed prices, prompting a further reduction in shareholder equity;
4) go back to 1) and continue the vicious cycle until shareholder equity goes negative and the company becomes insolvent.
Let's return to the basic balance sheet of a typical financial company before the writedowns:
To read the remainder, click on: http://www.hussmanfunds.com/wmc/wmc080929.htm.
Friday, September 26, 2008
Post No. 46a: A Somewhat Different Analysis of What Led to Our Current Economic Situation
Article of Interest from Edge.org
Economic Dis-Equilibrium: Can You Have Your House and Spend It Too?
by George Dyson
http://www.edge.org/3rd_culture/dysong08.1/dysong08.1_index.html
Economic Dis-Equilibrium: Can You Have Your House and Spend It Too?
by George Dyson
http://www.edge.org/3rd_culture/dysong08.1/dysong08.1_index.html
Tuesday, September 23, 2008
Post No. 44a: An Argument for Further Deliberation about Our Financial Situation
Copyright 2008 The New York Times Company
September 22, 2008
Op-Ed Columnist
Cash for Trash
By PAUL KRUGMAN
Some skeptics are calling Henry Paulson’s $700 billion rescue plan for the U.S. financial system “cash for trash.” Others are calling the proposed legislation the Authorization for Use of Financial Force, after the Authorization for Use of Military Force, the infamous bill that gave the Bush administration the green light to invade Iraq.
There’s justice in the gibes. Everyone agrees that something major must be done. But Mr. Paulson is demanding extraordinary power for himself — and for his successor — to deploy taxpayers’ money on behalf of a plan that, as far as I can see, doesn’t make sense.
Some are saying that we should simply trust Mr. Paulson, because he’s a smart guy who knows what he’s doing. But that’s only half true: he is a smart guy, but what, exactly, in the experience of the past year and a half — a period during which Mr. Paulson repeatedly declared the financial crisis “contained,” and then offered a series of unsuccessful fixes — justifies the belief that he knows what he’s doing? He’s making it up as he goes along, just like the rest of us.
So let’s try to think this through for ourselves. I have a four-step view of the financial crisis:
1. The bursting of the housing bubble has led to a surge in defaults and foreclosures, which in turn has led to a plunge in the prices of mortgage-backed securities — assets whose value ultimately comes from mortgage payments.
2. These financial losses have left many financial institutions with too little capital — too few assets compared with their debt. This problem is especially severe because everyone took on so much debt during the bubble years.
3. Because financial institutions have too little capital relative to their debt, they haven’t been able or willing to provide the credit the economy needs.
4. Financial institutions have been trying to pay down their debt by selling assets, including those mortgage-backed securities, but this drives asset prices down and makes their financial position even worse. This vicious circle is what some call the “paradox of deleveraging.”
The Paulson plan calls for the federal government to buy up $700 billion worth of troubled assets, mainly mortgage-backed securities. How does this resolve the crisis?
Well, it might — might — break the vicious circle of deleveraging, step 4 in my capsule description. Even that isn’t clear: the prices of many assets, not just those the Treasury proposes to buy, are under pressure. And even if the vicious circle is limited, the financial system will still be crippled by inadequate capital.
Or rather, it will be crippled by inadequate capital unless the federal government hugely overpays for the assets it buys, giving financial firms — and their stockholders and executives — a giant windfall at taxpayer expense. Did I mention that I’m not happy with this plan?
The logic of the crisis seems to call for an intervention, not at step 4, but at step 2: the financial system needs more capital. And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to — a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place.
That’s what happened in the savings and loan crisis: the feds took over ownership of the bad banks, not just their bad assets. It’s also what happened with Fannie and Freddie. (And by the way, that rescue has done what it was supposed to. Mortgage interest rates have come down sharply since the federal takeover.)
But Mr. Paulson insists that he wants a “clean” plan. “Clean,” in this context, means a taxpayer-financed bailout with no strings attached — no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review “by any court of law or any administrative agency,” and this adds up to an unacceptable proposal.
I’m aware that Congress is under enormous pressure to agree to the Paulson plan in the next few days, with at most a few modifications that make it slightly less bad. Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world we have to do exactly what it says now now now.
But I’d urge Congress to pause for a minute, take a deep breath, and try to seriously rework the structure of the plan, making it a plan that addresses the real problem. Don’t let yourself be railroaded — if this plan goes through in anything like its current form, we’ll all be very sorry in the not-too-distant future.
Copyright 2008 The New York Times Company
September 22, 2008
Op-Ed Columnist
Cash for Trash
By PAUL KRUGMAN
Some skeptics are calling Henry Paulson’s $700 billion rescue plan for the U.S. financial system “cash for trash.” Others are calling the proposed legislation the Authorization for Use of Financial Force, after the Authorization for Use of Military Force, the infamous bill that gave the Bush administration the green light to invade Iraq.
There’s justice in the gibes. Everyone agrees that something major must be done. But Mr. Paulson is demanding extraordinary power for himself — and for his successor — to deploy taxpayers’ money on behalf of a plan that, as far as I can see, doesn’t make sense.
Some are saying that we should simply trust Mr. Paulson, because he’s a smart guy who knows what he’s doing. But that’s only half true: he is a smart guy, but what, exactly, in the experience of the past year and a half — a period during which Mr. Paulson repeatedly declared the financial crisis “contained,” and then offered a series of unsuccessful fixes — justifies the belief that he knows what he’s doing? He’s making it up as he goes along, just like the rest of us.
So let’s try to think this through for ourselves. I have a four-step view of the financial crisis:
1. The bursting of the housing bubble has led to a surge in defaults and foreclosures, which in turn has led to a plunge in the prices of mortgage-backed securities — assets whose value ultimately comes from mortgage payments.
2. These financial losses have left many financial institutions with too little capital — too few assets compared with their debt. This problem is especially severe because everyone took on so much debt during the bubble years.
3. Because financial institutions have too little capital relative to their debt, they haven’t been able or willing to provide the credit the economy needs.
4. Financial institutions have been trying to pay down their debt by selling assets, including those mortgage-backed securities, but this drives asset prices down and makes their financial position even worse. This vicious circle is what some call the “paradox of deleveraging.”
The Paulson plan calls for the federal government to buy up $700 billion worth of troubled assets, mainly mortgage-backed securities. How does this resolve the crisis?
Well, it might — might — break the vicious circle of deleveraging, step 4 in my capsule description. Even that isn’t clear: the prices of many assets, not just those the Treasury proposes to buy, are under pressure. And even if the vicious circle is limited, the financial system will still be crippled by inadequate capital.
Or rather, it will be crippled by inadequate capital unless the federal government hugely overpays for the assets it buys, giving financial firms — and their stockholders and executives — a giant windfall at taxpayer expense. Did I mention that I’m not happy with this plan?
The logic of the crisis seems to call for an intervention, not at step 4, but at step 2: the financial system needs more capital. And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to — a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place.
That’s what happened in the savings and loan crisis: the feds took over ownership of the bad banks, not just their bad assets. It’s also what happened with Fannie and Freddie. (And by the way, that rescue has done what it was supposed to. Mortgage interest rates have come down sharply since the federal takeover.)
But Mr. Paulson insists that he wants a “clean” plan. “Clean,” in this context, means a taxpayer-financed bailout with no strings attached — no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review “by any court of law or any administrative agency,” and this adds up to an unacceptable proposal.
I’m aware that Congress is under enormous pressure to agree to the Paulson plan in the next few days, with at most a few modifications that make it slightly less bad. Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world we have to do exactly what it says now now now.
But I’d urge Congress to pause for a minute, take a deep breath, and try to seriously rework the structure of the plan, making it a plan that addresses the real problem. Don’t let yourself be railroaded — if this plan goes through in anything like its current form, we’ll all be very sorry in the not-too-distant future.
Copyright 2008 The New York Times Company
Wednesday, September 10, 2008
Post 41c: Article of Interest from Forbes.com
Adviser Soapbox
Professional Bailout No. Six
Ron Rowland, All Star Fund Trader 09.08.08, 2:49 PM ET
Austin, Texas -
Monday brought a sense of deja vu in the markets. How many financial sector bailouts can we have in one year? Quite a few, apparently. Six times in the last 13 months, the game has changed or appeared to change due to political intervention in the markets. Let's review:
August 2007: The Federal Reserve makes emergency cut in the discount rate
December 2007: Fed announces creation of special lending privileges for banks
January 2008: Another emergency 75 basis point rate cut
March 2008: Bear Stearns bailout
July 2008: First Fannie/Freddie rescue attempt
September 2008: Another Fannie/Freddie rescue attempt
The latest action effectively brings Fannie Mae and Freddie Mac under governmental control. Existing shareholders in these institutions are not, to our surprise, being totally wiped out--yet. There is still plenty of time for that to happen.
There is an even bigger loser in this transaction: anyone who owns U.S. Treasury bonds. Interest rates spiked higher, leaving the principal value of government debt sharply lower than it was last week. This is perfectly logical. Having just taken on the massive obligations of Fannie and Freddie, the Treasury's own credit rating had to take a hit. There are no free lunches.
In the big picture, the government's goal is clear: drive down mortgage rates and, more important, convince bankers to actually lend money to people who want to buy houses. Wholesale mortgage rates dropped dramatically Monday morning, so by that standard we have to say the bailout is doing what it is supposed to do. Whether the new liquidity will trickle down to individual borrowers is not yet clear.
Will the sixth bailout be the charm? The record of the last year is not very encouraging. Each action brought a market rally, but the rallies have been getting progressively weaker and shorter each time. As noted above, there are no free lunches. Risk cannot be eliminated, but it can be moved around. What is happening now is that the losses in the mortgage market are being transferred to what may be the only larger fixed-income sector: U.S. Treasury securities.
Since other kinds of bonds take their cue from the Treasury market, the bottom line is that interest rates on all kinds of debt will rise so that those who lost money in mortgage debt can be saved from loss. Is this a good thing? Maybe. But whatever it is, it is not capitalism. It is not what happens when markets are allowed to operate freely and without interference.
In a free market economy, people bear the cost of their own decisions, for better or worse. With that principle out the window, who will be next? This precedent is now in place: If an industry proves that its continued functioning is crucial to the economy and its failure will bring widespread pain, it is entitled to be saved from its otherwise inevitable demise by the collective action of society. The automobile industry is already making noise along these lines. Other applicants will no doubt follow.
For now, stocks are rallying around the globe. Monday morning's opening surge faded with remarkable alacrity, though, suggesting that at least a few investors remain skeptical. We count ourselves among them.
Professional Bailout No. Six
Ron Rowland, All Star Fund Trader 09.08.08, 2:49 PM ET
Austin, Texas -
Monday brought a sense of deja vu in the markets. How many financial sector bailouts can we have in one year? Quite a few, apparently. Six times in the last 13 months, the game has changed or appeared to change due to political intervention in the markets. Let's review:
August 2007: The Federal Reserve makes emergency cut in the discount rate
December 2007: Fed announces creation of special lending privileges for banks
January 2008: Another emergency 75 basis point rate cut
March 2008: Bear Stearns bailout
July 2008: First Fannie/Freddie rescue attempt
September 2008: Another Fannie/Freddie rescue attempt
The latest action effectively brings Fannie Mae and Freddie Mac under governmental control. Existing shareholders in these institutions are not, to our surprise, being totally wiped out--yet. There is still plenty of time for that to happen.
There is an even bigger loser in this transaction: anyone who owns U.S. Treasury bonds. Interest rates spiked higher, leaving the principal value of government debt sharply lower than it was last week. This is perfectly logical. Having just taken on the massive obligations of Fannie and Freddie, the Treasury's own credit rating had to take a hit. There are no free lunches.
In the big picture, the government's goal is clear: drive down mortgage rates and, more important, convince bankers to actually lend money to people who want to buy houses. Wholesale mortgage rates dropped dramatically Monday morning, so by that standard we have to say the bailout is doing what it is supposed to do. Whether the new liquidity will trickle down to individual borrowers is not yet clear.
Will the sixth bailout be the charm? The record of the last year is not very encouraging. Each action brought a market rally, but the rallies have been getting progressively weaker and shorter each time. As noted above, there are no free lunches. Risk cannot be eliminated, but it can be moved around. What is happening now is that the losses in the mortgage market are being transferred to what may be the only larger fixed-income sector: U.S. Treasury securities.
Since other kinds of bonds take their cue from the Treasury market, the bottom line is that interest rates on all kinds of debt will rise so that those who lost money in mortgage debt can be saved from loss. Is this a good thing? Maybe. But whatever it is, it is not capitalism. It is not what happens when markets are allowed to operate freely and without interference.
In a free market economy, people bear the cost of their own decisions, for better or worse. With that principle out the window, who will be next? This precedent is now in place: If an industry proves that its continued functioning is crucial to the economy and its failure will bring widespread pain, it is entitled to be saved from its otherwise inevitable demise by the collective action of society. The automobile industry is already making noise along these lines. Other applicants will no doubt follow.
For now, stocks are rallying around the globe. Monday morning's opening surge faded with remarkable alacrity, though, suggesting that at least a few investors remain skeptical. We count ourselves among them.
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