The media is spinning fear to bump ratings. When is this going to stop.
I think an important understanding of the $700 billion dollar plan is that the government is buying out the assets at a fair value. Going in and seeing the cash flows and putting a firm value on the assets. Not bailing out, it is unfortunate that institutions under distress need to sell these assets to create liquidity. They were starting to be forced to sell them for very little. Now this is the same thing happening
This could not cost us anything over 5 years as the government will be able to sell the assets, take the cash flows and even possibly turn a profit. The same goes for AIG and the $80 Billion, they own 80%, so it creates lots of potential for government to sell for a WIN. The government is being forced into buying these assets at this distressed time, yet those who buy LOW, often have a better chance to sell HIGH. The volume of the buys create stability for the economy and historically, we look at any index – S&P or Dow 30 and we have positive returns over 10 years. So the Government could be making their best investments ever. The only other known buyer is Warren Buffett. I would never bet against his opinion.