Facing real estate severe downturn, there are so many analysis, outcries or arguments to government's "aids", "baiout", "take over", or "nationalization" leading to a devastating selloff of Freddie and Fannie's stocks yesterday. So much have been said, so much noisy sounds confused us.
Enough is enough. Nowadays, all those people in media have been trying to give us a picture of "no hope." Is it really a doomsday right at the corner? Wrong.
Is government's aid or bailout so terrible to investors or taxpayers? I have no simple answer to that. Or I may say there is no right or wrong answer to that. It will depends on which perspective you will take or what kinds of steps U. S. government will take. I hope those solutions provided by "stimulus program" or "rescue" bill are effective, not a corrupted, method to solve the problems we are facing. Even so far I don't even see they are correct or effective, I keep myself optimistic and believe tomorrow will be better.
Why I say that? Everyone has his theory or speculation towards today or tomorrow. I believe it is very difficult to change people's minds or sentiment by a theory or argument, when I look around to see so many intelligent people speaking the results are the cause. I don't want to convince you guys by any theory. It would be of no use. What I am going to do?
I am old enough to go through so many things. So many modern people don't like to read History. Okay, I am not going to ask you read ancient Rome history. let's just look backward for 30 years. There is a fact of so-called "Lacocca Miracle": Lacocca became chairman in 1979 and helped the automaker stave off bankruptcy during a severe auto downturn, retiring in 1992.
It is so vivid in my minds as it happen yesterday. I don't ask you to read all the articles about this miracle. Make it very simple, just read an old article published by Times in 1979. Will you see or hear the same rhythm such as "bailout" saturated yesterday and today? Just as Mark Twin said, "History won't repeat itself, but will play the same rhythm."
Hope everyone has his or her discovery or lesson on the similarities now and then. Certainly we have to replace the old day's "millions" dollars with "billions", "billion" with "trillion" because time has changed. 50 years ago, a person who left less than $3 million in his inheritance would be qualified as one of the richest. Now nobody will be listed as one of the richest if he is just a "millionaire," he has to be a "billionaire."
Here for your reference, I post the web link of Times as follows:
Monday, Aug. 20, 1979
Chrysler's Crisis Bailout
Questions about whether a quick federal fix is right-and will be enough The Carter Administration decided last week that now was the time to come to the aid of the nation's most beleaguered major company. After weeks of rising pressure for a federal fix for the multiplying problems of Chrysler Corp., Treasury Secretary G. William Miller produced-and Jimmy Carter approved -a Government bailout. It was designed to prevent the nation's No. 3 automaker (1978 sales: $13.6 billion) from sliding into a bankruptcy that could have put many thousands out of work and sent a shudder through U.S. financial markets.
Beamed Chrysler Chairman John Riccardo "We are extremely encouraged. This fits the bill."
In his first public act at the Treasury, Miller spelled out the ideological ground rules of federal aid and warned other troubled companies against expecting similar help. Such assistance, he said, "is neither desirable nor appropriate, being contrary to the principle of free enterprise." But Chrysler was an unusual exception, he added, in which the Administration "recognizes that there is a public interest in sustaining [its] jobs and maintaining a strong and competitive national automotive industry."
Despite Chrysler's immediate enthusiasm, the Treasury package falls far short of what the company sought. It does not give Chrysler the $1 billion cash aid that some analysts insist is the minimum it needs to keep going until late next year.
That is the earliest time Chrysler can expect to make money from the new generation of front-wheel-drive compact cars now being developed by President Lee lacocca, who will replace Riccardo as chief executive by this year's end.....