BAILOUT BLUES

摘要

I wince at the $700 billion bailout. It was a necessary evil, but it doesn't make me feel good as an investor. I think you should be very cautious for the next several months. Hold on to your blue chips, but don't buy speculative stocks. Keep some cash with which to buy stocks as they get cheaper. Keep your bond maturities short for the inevitable inflation to follow.rnCongress-and Ben S. Bernanke and Henry Paulson-had to do something to contend with the worst financial panic since the 1930s. The panic has threatened the solvency of most of the nations commercial banks, almost completely blocked credit for businesses, shut down the commercial paper market and curtailed auto loans. It could lead to a severe, prolonged recession.rnHow could the U.S., the strongest country on earth, put itself into this horrific situation? First, as both presidential candidates have stated, regulators took their eyes off the ball. Safeguards put in after the 1929 crash to rein in bank speculation were abandoned. The Securities & Exchange Commission relaxed the uptick rule on short-selling and failed to enforce the rules against naked shorting. This made room for the bear attacks against banks and brokers that sent Lehman Brothers into the dumpster and pulled down some banks' stocks by 80%.