For, Against Uncle Sam's Bailout

For, Against Uncle Sam's Bailout
By DAN DORFMAN
September 22, 2008

The exact details have yet to be spelled out, but an internationally known global money manager, Jim Rogers, a transplanted New Yorker now residing in Singapore, is denouncing Uncle Sam's estimated $700 billion rescue package, saying he's convinced the fallout from the bailout would be disastrous.

"It's astonishing, devastating, and very harmful for America and American citizens," he tells me. "It means we're in for the worst recession since World War II, as well as higher long-term interest rates, higher inflation, higher taxes, a weaker dollar and substantially lower stock prices."

That's his reaction to the government's efforts to relieve the banks of hundreds of billions of dollars of bad debts and revitalize the floundering credit markets by injecting a heavy dose of fresh new liquidity into the financial system.

Addressing the explosive two-day Dow Jones Industrial Average rally of nearly 779 points, Mr. Rogers ridicules the buying binge, insisting that investors "were foolishly sucked in by hysteria and a buying panic. I wouldn't buy now because it's insane." Describing the rise as artificial and unsustainable, he contends "it's only a matter of time before reality sets in and the market heads down again." Making matters worse, he says, it's "embarrassing to see how little the presidential candidates know or grasp what's going on, just like the current administration."

Mr. Rogers, one of Wall Street's great success stories — he made millions working with George Soros in the 1960s and 1970s — evokes the 1970s, when a Federal Reserve chairman, Arthur Burns, wouldn't let anyone fail, and insists we're making the same mistake again.
The 65-year-old manager presently owns some dollars and says he thought the recent greenback rally would continue. "Now I'm not so sure, that rally may be over," he says. Mr. Rogers has covered his short sales — a bet stock prices will fall — on Fannie Mae, Citigroup, and some companies in the homebuilder sector. On the buy side, he recently began to acquire stocks in China and Taiwan.

http://www.nysun.com/business/for-against-uncle-sams-bailout/86297/

23/09/2008
Jim has been lookng for USD rally, but with the 700b bailout, he was not so sure anymore. That rally may be over.