An analysis by the Associated Press finds the government’s purchase of stock in large and small banks has lost about $9 billion, or a third of its value, in just a month.
Short term losses are ok since we are in a downturn. The hope (Dream) of many who did these is in the long term we will profit.
The danger: Uncle Sam ends up artificially propping up banks in the long-term. In short, Federal guarantees could become a crutch for poor management. Somewhere along the line, someone needs to say that weaker financial institutions need to fail to assure the overall strength of the nation’s banking system.
They are a cructh cause we did not let anymore fail. In the end the losses must be realized. Trading with government only defers the loss.
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