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Buffet Bigger than Bush- $800 Billion Rescue Plan

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A remarkable piece of news just breaking. Warren Buffett, the investment Gandalf, has just pledged a rescue package which offers to insure US$ 800 billion in tax-exempt bonds of the 3 big bond insurers which are MBIA, Ambac Financial and FGIC.

This significantly out do the economic stimulus package unveiled by President George Bush Jr at a puny $170 billion in comparison. It shows the financial power held by an organisation like the Berkshire Hathaway overpowering the financial forces by the President of the most powerful country in the world. The plan by Bush has a trickle down effect, but the Buffet plan wins hands down in terms of the confidence it sends to the financial markets when one of its own is willing to put a huge sum of money to insure the bonds which were in danger of being downgraded and becoming written down or totally write off by the banks. That could have caused a major financial meltdown and make the Great Depression look like a ripple in a pond.

However, the best news for the embattled house owners facing eviction is that 6 of the mortgage lenders in US are finding ways to help houseowners avoid foreclosure and eviction from their properties. This was something that they can do and which in the end will help the mortgage lenders too.

With the big corporations and astute investors like Warren Buffet in the picture and doing what they can to ease the financial crisis arising from the sub-prime loans it bodes well and should make the coming recession much easier to bear.

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KristyCK said...
February 13, 2008 at 2:49 AM  

That's a great news. Hopefully more big corporations and investors will come up with something. Just a month ago Bank Of America bought mortgage lender Countrywide Financial Corp. But the recession is just way too late to avoid. Unfortunately, it will hurt SEA economy too. :-(

axileon said...
February 13, 2008 at 11:22 PM  

hey.. thanks for your comment.. i roughly know what i am going to do now... thanks a lot for your advice.. good luck to you on your financial freedom....

Lemizeraq said...
February 16, 2008 at 1:15 AM  

Yep, it will hurt SEA economy. Recently one highly paid person said that Singapore wouldn't be affected because we have India and China rising. But the financial crisis in US has a chance of spreading worldwide because of the nature of the sub-prime loans. It is going to be international in nature.

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