Posted on 07/01/2009 4:24:00 PM PDT by FromLori
These firms might be ''too big to fail,'' but your portfolio isn't.
The U.S. government may believe that some firms are too big to fail, but does that mean that you should invest in these federally backed hulks? After all, if a company is being inflated with taxpayer dollars, that means it's been deemed important, and if it's important that means eventually its shares will reflect this, right? Not necessarily, says our team of industry observers. In fact they recommend investors flee failing, but subsidized, behemoths in favor of firms that have actually managed their accounts in a smart and prudent manner.
First, though, the counter-argument for why those with money to invest might be tempted to put in a firm that the government has decided must live, a la Frankenstein's Monster. After all, you may not like Fannie Mae ( FNM - news - people ), Freddie Mac ( FRE - news - people ), American International Group ( AIG - news - people ), Citigroup ( C - news - people ) or any of the other companies on Uncle Sam Steroids, but you also can't deny that after their respective public swoons they've rebounded strongly.
Ever since the Standard & Poor's 500 hit an intraday low of 666 on March 9, failing firms deemed TBTF by the U.S. government--literally firms propped up by taxpayer dollars--have largely outstripped the performance of the markets at large. Citigroup, held aloft by some $50 billion in bailout dollars, with hundreds of billions more at the ready if need be, is up 190.3% in that time. Hapless AIG is up 167.4%. Mortgage mess Fannie Mae has rocketed up 65.4%, while its littler sibling Freddie Mac ratcheted up 31.6%. The S&P 500 is up 35.9%.
(Excerpt) Read more at forbes.com ...
Propagand to suck what you have left out of you.
What happened to antitrust law????
Companies should not get too big to dominate the market.
Oh, I forgot about the “lobbyists” greasing both sides to get away with it and be left to be “too big to fail”.
GARBAGE! AIG just did a 20-1 reverse split today, and their price STILL dropped. Even with taxpayer money in their pocket, AIG is a failure!
FNM (F***-me-once) and FRE (F***-me-twice) aren't in any better position.
Exactly propaganda
http://247wallst.com/2009/07/01/aigs-futile-reverse-split-to-nowhere-aig/
http://benbittrolff.blogspot.com/2009/06/aig-ready-to-blow-up-again.html
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