The Bailout and Me

I have been trying to say something about what I have been thinking of the whole financial mess we all are in and the subsequent bail-out drama. The views expressed here is purely personal. Well thats the blog concept is all about, isnt it ? Hmm.. Well my point was I am not trying to say "Mr Bush" created it, or Mr Banker created it and so on.. All I am trying to say is, "we are in mess". And Personally I think everything goes up has to come down (Well not coincidentally , originally not mine; I would say its learned from the Famous guy who failed in Maths in his school days. Never mind)!!

So applying the same concept of gravity in a general sense, the Asian stock market boom, the Oil price surge, the technology innovation etc will one day would have seen a shrink. And thats what it is not. You would probably argue that, "if we would not have done A, we would not have landed up being in B". Thats true. Probably the A-B thing helped in being in this mess, but I would not see its totally teh reason. 

We are digressing from the topic too much.. Lets come back to the blog.. What I feel about the whole thing. This is sure that, we are in mess. What I want to tell you is, where do I stand for the whole bail-out thing. In simple terms, I say, I dont support it. I dont think it will help. You would ask why ? Not that I claim to be a super intelligent economist or something. But I have some fairly simple reasons.  

Reason 1: Mr John Doe is a home owner. He had a job. He had calculated his mortgage, car loan, education assistance to his kids and the phone bill, and the cable / internet bill. Now he has lost his job. He is no more able to pay his mortgage. Well not only mortgage, his gas bill, grocery and so on.  

Now, the fed is funding the banks to unfreeze credit. So far so good. So our Mr Doe, is defaulting his mortgage, car loans now. He goes to the bank and bank turns him down looking at the credit history. He comes back and files for foreclosure and returns the car to the dealer as he cant pay. 

So my understanding is, the bailout may be a great thing in the long terms and in bigger context of things. But if we dont save Mr Doe, then the problem in the grassroot level still remains. And to me, it looks like, its much more important to look at Mr Doe than Mr Banker at this moment. 

Reason 2: We started the whole bailout thing since last 1 month roughly. We said, this will increase investor confidence, the market will come up, the OPEC guys will nto be scared etc etc. Has not seen any progress so far. My 401K is down 49.6 percent to be exact. 

I have so many other reasons. But I think you got the point.. We need to address this issue from the root level.