Okay, so let me get this straight. Not only were certain banks forced by the powers that be to take TARP money, now that they want to pay it back, they have to ‘prove’ to those same powers that be that they can raise money in the public market. So at first the taxpayers got screwed and now the shareholders of these certain banks get diluted and lose 4% overnight as these banks had multi billion dollar stock offerings.
When will all of this nonsense stop? After all why should these banks have to prove that they can raise money? I thought that the results of the ’stress test’ was proof in the pudding as to the financial situation of individual banks?
If this isn’t further proof of the dangers of government intervention, I don’t know what is. Anyone notice a pattern? Government gets involved in an industry, taxpayers have to foot the bill as billions of dollars are thrown into a black hole, and then the government sets another rule that ends up diluting or in the case of the auto’s, completely wiping out any value that shareholders had.
As usual it’s the little guy that gets screwed!
Written by: Aaron Katsman | April 2, 2009
Oh, the beauty of have controls on gasoline. Not. It was announced last night that the price of 95-octane rose by over 8%.
According to Ynet: “The price of octane-95 gasoline is now set at NIS 5.46 ($1.29) per liter, an 8.33% rise compared to March. In Eilat a liter of octane-95 gasoline costs NIS 4.74 ($1.12), an 8.47% rise compared to last month. The gas station service charge will remain unchanged from March, at 13 agorot (3 cents) throughout the country and 11 agorot (2.6 cents) in Eilat. As of February, the price of octane-96 gasoline is no longer supervised, and therefore its maximum price is not included in the ministry report. The ministry recommended consumers compare prices of octane-96 gasoline at different gas stations, since this could lead to a 5% save in gas prices. The increase in gas prices follows the continuing rise in the price of oil. During the month of March the price of a barrel of oil rose by 25%, from $40 a barrel at the start of March to $50 a barrel by the end of the month.”
Funny that while crude oil prices dropped by more than 70% the prices at the pump dropped a fraction of that. Humm….price controls.. Ughh.
Aaron Katsman
IsraelNewsletter.com
Clearly demonstrating his total misunderstanding of how a free-market works, Democratic presidential candidate Barack Obama said ‘it would be a shame’ if Anheuser-Busch (NYSE:BUD) was sold to a foreign company.
According to a Reuters report, Obama said, ” I think we should be able to find an American company that is interested in purchasing Anheuser Busch if in fact Anheuser-Busch feels that it’s necessary to sell.”
Huh?
Who is the ‘we’ Obama is referring to? Is it the government? Since when is the US government an investment banker? It’s not exactly a secret that the maker of Budweiser is in play. If there was a US company interested in purchasing Anheuser-Busch, they could put out an offer. The lack of a competitive offer means that no one is interested based on the asking price. Isn’t that rather obvious? Maybe the government should nationalize the company, in order to keep it in American hands!
Is Obama advocating the worst kind of government intervention? Does he really believe that he knows better than the market, regarding whether a publicly traded company should be sold and to whom? His protectionist tones mimic his beliefs on NAFTA. It sure appears that Obama has shown a consistent policy of being against free trade.
What’s wrong if an American company is sold to a foreign buyer? As fellow IOI colleague Zack Miller says, ” Isn’t his policy xenophobic?” Conversely, what are his feelings about an American company buying a foreign firm?
From the little we know about his stance on free trade, the impact to Israel as well as the global economy could be profound. If Obama wants to make the US into an economic island, it would cause not just catastrophe to nations no longer able to export their goods into the US, but would harm the US consumer, with less choice and more costly goods.
Someone needs to ask Obama to explain in depth his belief that we need to find an American company to buy Anheuser-Busch. As I mentioned, if he really is a protectionist, shouldn’t the voters be made aware of this and shouldn’t he need to explain his position?
In order for the economy to grow we need less government intervention not more. Let the market sort things out, and keep the government out of the way.
Disclosure: Author’s fund has no position in any stock mentioned as of 7/09/08.
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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
