The Bailout

With news of the government’s bailout and the ban on shortselling, the US stock market jumped on Thursday's closing and then continued on Friday. A bailout is effectively the government’s way of saying that they can’t allow the market to continue this freefall. At least, this stops the market’s bleeding for now.

Several points to highlight:

1. The sudden boost in the market is largely due to the covering of the short positions. Pending good news during the weekend, I wouldn't be so eager to say the market is turning.
2. The reason why one company's collapse can lead to the whole market panic is because of the diverse exchange of financial commitments in the market which creates an intrinsic bond tying everything everywhere together. On the big scale, it is known as globalism.
3. The US and the world has been consuming too much, leading to uncontrolled inflation.
4. They are buying stuff they can't really afford and doesn’t need even in the midst of global inflation. It is better known as speculation, which is simply a grand word for gambling.
5. Bubbles which led to the housing crisis are brought about by the greedy and ignorant who bought what they could not afford, and the sharks who loaned them the money to do so
6. It is simply ridiculous that US has accumulated extra trillions in debt in less than a decade. There is no such thing as a free lunch. And in the case of markets, it is as simple as what goes up must come down.
   
7. While they are accumulating debt, they are also not spending the money they borrowed correctly. How are buying the mortgage foreclosures of the credit crisis and giving money to corporations to save them from their own greediness supposed to help the public? It's their mess, let them find a way to fix it. Meanwhile, help the people who need help by boosting manufacturing and consumer spending with tax relief or incentives.
8. Give up on the American dream. If you want to get rich, work for it. All these unrealistic delusions about making money the easy way are what got us here in the first place.
9. People need to start thinking of consequences. The thing about credit is trust. Now we either grant trust on a much more conservative basis or we implement more serious penalties for those who abuse trust. In any case, I think the first to go has to be the bankruptcy protection which transcends irresponsibility, basically telling people that's the worst they can do.