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An End to a Capitalist Era – the Congress Bailout

Dow Jones September 2008

The first economic politics of the USA were founded on Adam Smith’s “Wealth of the Nations”. He argumented that the best economies worked based on the invisible hand of the market, who allocated the resources based on the individual’s needs and resources. This doctrine was so influential, that it is still present in the liberal ideologies of the most advanced countries govenrments. Or it was, untul yesterday evening.

When the Congress decided to pass the $700 billion bailout plan, it actually ruled something much more durable and important. It ruled the end of a ultra-liberal era, which started at the beginning of the 19th century and reigned the US free market economy until mrecently. It also shows that Harvard is no longer what it used to be.Read More »An End to a Capitalist Era – the Congress Bailout

Gold gains luster again

What are the investors turning to when they can’t buy shares anymore? Well, to gold and to raw materials – because these assets are counter-cyclical.

And of course, now its the moment when can sell futures on the gold price – if you think it is going down, or to buy – if you think that the investing crisis will continue for a while.Read More »Gold gains luster again

What Votes Can Do

Today, October 1st, the US Senate has voted finally the law which allows them to rescue the troubled stock exchange markets which they failed to oversee. The rescue plan, which would allow the Treasury Department to buy problem mortgage-related assets from banks, was the most important base for government action to unlock credit markets and ease a deeper economic downturn in the United States and abroad.Read More »What Votes Can Do

The End of an Investments Era

 Until last year it was normal for the traders to practice short selling (defined as selling share which you do not own but you will supply in a maximum of a period established by contract, obviously by buying them later). Or to sell the mortgages packed in thousands for a hefty price based on average yields. Or to loan to an Americans family so that they were supposed to pay in installments in one year more than they earned. Or, as was mentioning some time ago, to value higher and higher the shares of the investment banks, which measured their own assets.Read More »The End of an Investments Era