Saturday, September 13, 2008

Will the U.S. Government come out as a Superman again?

It was just a week ago, the U.S. Government finally came out to take over Fannie Mae and Freddie Mac to keep high market confidence on the U.S. financial market. Which the next U.S. big and huge financial institutions that will be rescued by the U.S. Government? Lehman Brothers, AIG, WAMU, etc?

Foreign markets which are always reliable on the U.S. Market, such as Asia market and everybody else know holding their deep breath till this following Monday, what will next happen to Lehman Brothers, Inc after the company got its quarterly loss $3.9 billion this week? Will the U.S. government come again as a Superman to bail out this company, like they just did on double FM (Fannie Mae and Freddie Mac)? Or will the U.S. government just wait and see the skittish investors who will unloaded their Lehman Brothers shares soon, or may be is it already happening?

Who still can say that the U.S. economy isn't in crisis yet? Who still can say the tax cut program is a good thing to do when in another side, the U.S. government itself needs a large amount of money for rescuing the sick-large financial institutions all the time? Then, who will finally pay for all these heroic actions if the U.S. government comes out every time to bail out the companies, such as Fannie Mae, Freddie Mac, and may be Lehman Brothers, etc? IT'S US, THE TAX PAYERS.

The bad news is all of these U.S. financial market situations are just the beginning economics disasters for the U.S. financial market. We'll still read and hear a lot more in the near future. There is too much homework that the U.S. government needs to manage properly. To keep the high market confidence on the U.S. financial institutions is not enough by just coming to rescue these sick-large financial institutions all the time when the U.S. government itself lacks of cash. If these heroic actions are performed all the time, the tax payers will always have to share the burden with these heroic actions. So, is it the time for these large financial institutions to feel and taste the risk of their own high expansion activities? This is so dillematic. Lehman Brothers, Inc said they will raise the money by selling their profitable units to fund their current business operating. How far will they do it? Should the U.S. Government wait and let they do it? Time to take an action, NOT just NATO (No Action Talk Only).

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