So, does this 940-point rebound prove that Socialism works?

[Orrex]

What are the freemarketeers saying about this historic, record-breaking, one-day jump that comes in the wake of an historic, record-breaking, one-day infusion of public money?

[rainy]

1. Its not socialism until we share in the profit. Let's see if that happens.

[Orrex]

3. True--good point

Then let me rephrase the question: does this prove to the freemarketeers that we have Socialism for the rich and for corporations?

[WannaJumpMyScooter]

2. people grabbing stuff cheap

looking to sell short or for the "big rebound"

[Robbien]

4. We are going to regret this later

That's what CNBC pundits are saying.

They look like they have all sucked on a bushel full of lemons.

[WannaJumpMyScooter]

11. just for the record.... I regret it NOW

and have all along

[ixion]

15. me too

while this makes people feel better on the short term, we've screwed ourselves royally long term.

[ramapo]

5. No, it proves the market is a short-term craps shoot

It is a crazy place and today was the day that calmer heads made lots of money off the panic selling of last week.

[Orrex]

8. That's my impression as well

The ones who wait a few minutes don't get trampled when someone yells "fire!" in the theater.

[lldu]

6. No! Watch it go down tomorrow ....................N/T

[MindMatter]

7. It shows that the Brits did it the right way

I don't know if it is fair to say it is fascist versus socialism. But what we know for sure is this.

A $700 trillion bailout that had no specific plan, no assurance of good execution, nor clearly identified purpose, not particular problem it as trying to solve, and no definite time-line fell flat on its face. And I guess the American taxpayers are out the $700 trillion with nothing to show for it.

On the other hand, the British plan attacked the problem head on. It started with the premise that the banks had been mismanages -- a premise that seems obvious on the face of it. And that led them to the solution that has been applauded by free markets all over the world, include the American stock market. Let's recap the main points:

- The British government (the taxpayers) are taking an EQUITY interest in the banks. This provides an immediate cash infusion that will allow the banks to get back on their feet.

- But because of the equity position, the existing shareholders will only profit from this infusion if the bank turns itself around. The existing shareholders do not profit from the past mismanagement.

- If the banks become solvent, they will buy out the government equity position and the British taxpayers will be whole.

- The existing executives will be sacked without parachutes. The second tier of executives will have all bonuses frozen.

And here's the key provision that attacks the problem head on. If they take this money, they have to resume lending to the public and other banks at the same rate they did in 2007. They can't just grab the cash and run.

This is the right way to do it. Well done Great Britain. Now that we see almost universal approval of this this program, how about we take another vote on our program. Kill the Paulson plan and adopt the UK plan. It is clearly the right solution.

[librechik]

12. agree--and the markets are hoping we can be smart enough to follow their lead

without letting our absurd history of red-baiting get in the way.

[ElboRuum]

13. Just a point, there.

It's $700 billion with a "b", not $700 trillion with a "holy fuck that's alotta money."

I wouldn't otherwise mind, but we are talking three orders of magnitude there.

[MindMatter]

16. Thanks. As the old saying goes

A billion here and a billion there. Pretty soon, you're talking about real money. :)

[girl gone mad]

18. On the plus side, our officials have already dropped TARP..

and are planning to recapitalize instead of just buying up toxic assets.

[Jax]

21. Very informative post MindMatter

appreciate the good explanation.

"This is the right way to do it. Well done Great Britain. Now that we see almost universal approval of this this program, how about we take another vote on our program. Kill the Paulson plan and adopt the UK plan. It is clearly the right solution."

I completely agree.



Thank you,

Alyce

[ProdigalJunkMail]

9. no, it just proves that when you remove fear of failure

or even the possibility, that people will jump on the bandwagon...the problem is, if you can't fail, you really cannot win either.

sP

[leftofcool]

10. uh, no, it is state run capitalism

[zbdent]

14. um ... what's your bet on the size of the profit-taking drop Tuesday?

[deaniac21]

17. Bulls make money

Bears make money
Pigs get slaughtered

[stillcool]

19. Pigs get fattened up..

Hogs get slaughtered..in theory anyway.

[Leopolds Ghost]

20. Do you think it'll keep going up, or that the trend is up?

Giving money to the rich is not socialism. It's national socialism.

[sarcasmo]

22. More like Corporatism.

[TheWatcher]

23. Let's not call this a Market anymore. Let's call it what it truly is.