09/29/09 Baltimore, Maryland
Pop quiz: what happened a year ago today? Here’s a hint:
The House put the kibosh on the first rendition of The Emergency Economic Stabilization Act of 2008 — Former Treasury Sec’y Hank Paulson’s three-page request for a $700 billion blank check for his buddies on Wall Street.
“Investors” threw a tantrum, crashing the Dow 777 points — its biggest point loss in history. Approximately $1.2 trillion in Wall Street shareholder value was wiped out, also a record. This day a year ago, the real market pain began. The S&P fell about 20% over the next two weeks.
The House eventually passed a package — aimed at cleaning up “toxic assets” on big Wall Street balance sheets, but also rife with pork barrel spending. A year later… the stock market has recovered, Congress has spent plenty o’ money, but has anything been done to stave off future CDO or mortgage-backed calamity? No.
Time and clever accounting have put us deservedly back to square one… right? Or as Addison argues in his latest investment report, is this the “biggest financial swindle in world history, engineered by none other than Wall Street and Washington, DC.”
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Yes. It is. But as long as the market’s going up, idiots think all is well.