Aug 11 2011
The 700 Billion Dollar Bailout in Plain English
The 700 Billion Dollar Bailout in Plain English
My phone rang and a frantic client asked, “What is this 700 billion dollar bailout mean and what is it going to do to my investments?”
The answer that Warren Buffett gave on CNBC the morning of Sept. 24, 2008 makes sense to me. The bottom line? The bailout is necessary and will probably end up making money.
This answer surprises most people and here is the reason. First, the word “bailout” creates the wrong mental picture. Bailout sounds as if the government is going to dip into an existing pool of money, thereby depleting our resources, then give it to individual Wall Street firms as a business grant. This is not what is happening.
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