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ThunderSnow or What to do When The Sky Really is Falling (Buy AIG Maybe!)

March 4, 2009

ThunderSnow or What Happens When The Sky is Falling AIG

You will simply not believe this… We have just experienced some of the strangest weather ever seen in this part of the world. Just as tornados touched down all over the south, buckets of rain, sleet, but then the thundersnows started with some of the heaviest snowfall ever witnessed in such a short period of time… Snowflakes the size of your hand. Amber and red glow from the lighting… Just plain weird but beautiful. Now if to apply some of the current natural weather events with some of what is happing in the economy seems to fit in some kind of odd manner. The thunder snowstorm of a few days ago… It was just as about as odd as it gets. The weather was one way one moment and in the next the landscape had totally changed… Not unlike what we are currently experiencing in economy. And not unlike the economy it seemed like a once in a lifetime event. During the Great depression the stock market fell 35%, and today the markets have fallen over 50% from their all time highs. However there is a need to keep it all in perspective and be clear as to the cause.Because some are the reason advanced by some are just wrong. Chuck Saletta writes in the Fool:

Stocks for the Next Great Depression

On top of that, poorly crafted government reactions exacerbated both situations. During the Depression, the protectionist Smoot-Hawley tariff triggered global retaliation and contributed to a worldwide recession. More recently, poorly executed bank seizures and excessive subsidizing of failure have distorted the market’s ability to correct its excesses. Add a dash of protectionism from the “Buy American” provisions in the recent stimulus act — and the potential for retaliation — and you’ve got quite a foundation for Great Depression II.

Bit of an over statement and simplification of the current situation, which was NOT caused by overzealous investors but rather by systemic problems created in the subprime by the mortgage brokers along with the index services such as the Standard and Poors failure to recognize and properly to asset the risk by providing AAA bond ratings (either by intention or design) was clearly THE underling cause of the crash.

Now the “Oracle Of Omaha” has pronounced the country is in economic shambles… Well thank you Mr.Buffett, who is arguably one of the greatest investors of all time… Ok, Like Duh… Now what? Buy AIG! Of course:) Maybe not a bad idea to buy American because IT IS HERE IN AMERICA that we would hope to establish jobs… ATT maybe wish to create jobs in India but in looking at the situation it is clear to see we have uncovered another part of the problem. Some think we can fix stocks by fixing the “Global” economy… To wit the nit wits should realize by now that all economies are basically local…. Charity begins at home AND IF WE ARE GOING TO “FIX” the “WORLD” economy we need to get on own house and economic engine in order and working properly(In these parts that means buying Adidas, BMW, and Fords!)… Or so it would seem. No one in Wall Street so much as lifted a finger when Southern textiles and furniture industry was shipped out from under the Carolinas and left hundred of thousand standing in the unemployment lines. Suppose it all depends upon from the place in line where one stands, to know where one has been, to clearly know the place one wishes to be.

Of course with a 35% stake the American taxpayer already owns much of AIG and at 35c a share its not a bad deal.

One Comment leave one →
  1. March 28, 2009 8:09 pm

    Wow shot up just like a rocket… Stalled a bit of late but what a ride. If they ever get over the bad management (which is allowed to get away some really incredibly stupid stuff) this stock might do something… Besides get taken over by Uncle Sam.

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