When President Obama was campaigning, he insisted he had a plan to strengthen the financial system and help homeowners facing foreclosure. He won the election because he lied.
“Obama lied, western capitalism died!” Somehow I don’t think that will be the Young Republicans banner cry.
If he didn’t lie then what the heck is he waiting for? November, December, January and now half of February and no plan.
It’s clear he had no plan at all. Rather, three weeks in office, his Treasury Secretary lays out a “plan” that says “we are still planning on planning.” 500 points on the Dow later and another week where the same loans that were paying last week are paying this week, but will have to be marked down again because of ridiculous accounting rules. The more assets are marked down the more capital the regulators say the banks will need and with all the process without progress out of the new administration the less willing private capital will be willing to come in.
But this too shall end and when it does we will own a diversified portfolio of great American EVA companies at prices we will not see again in our lifetimes.
I don’t know when it will be OK, but I know it will be OK. The chart above shows it has since at least 1884 – a lot of stuff some worse than this happened between now and then.