Thursday, September 25, 2008

A Bit of Good News

Amidst the financial crisis, there is a bit of good news (over and above the fact that Buffett bought $5B worth of Goldman Sachs yesterday). Despite its many drawbacks, the $700B bailout bill should make taxpayers money over time. I've heard this now at least four times -- from Buffett, Paulson, Yale Economist Robert Schiller (who predicted the current meltdown), among others.

Hedge Fund Manager Andy Kessler, writing in today's Wall Street Journal sums it up this way, "My calculations, which assume 50% impairment on subprime loans, suggest it is possible, all in, for this [the government's] portfolio to generate between $1 trillion and $2.2 trillion -- the greatest trade ever."

1 comment:

Cap'n said...

I think it will...long run. Something has to be done. My question remains heads of these institutions being paid millions in a parachute for failure. JP Morgan bought WAMU today. Were it me, one stipulation to buying wouod be all comp bonuses had to be waived.