The Taiwanese government says it will bail out six indigenous DRAM memory makers and mere them into a new entity called Taiwan Memory Company, confirming months of speculation. Government officials are pursuing partnerships with either an American or Japanese chip maker, or perhaps both. The announcement of the formation of …
Bernanke's insider dealing
Good luck to them, right now it 100% protectionism and until assahts like Bernanke are removed it's not going to get better:
"The Fed refused yesterday to disclose the names of the borrowers and the loans, alleging that it would cast “a stigma” on recipients of more than $1.9 trillion of emergency credit from U.S. taxpayers and the assets the central bank is accepting as collateral. "
i.e. The Fed is running the printing presses to loan against assets and those assets are clearly not worth the paper because they can't reveal what was loaned against what collateral. Since the value of that money is built against these 'assets' that can't be sold in the marketplace it's effectively trading devaluation of dollar to subsidize industries.
So, Taiwan cannot know if the US is propping up its memory makers, so it's forced to prop up its own industry.
So you may think that bond you are buying has a market value of $100, but you don't know if that value is only there because of Bernanke has printed off some cash and paid $100 for a $20 asset to drive the price up.
Seriously, the man is an idiot, he's not helping, he's simply making things worse. By doing that he's casting doubt on even good businesses. The need for secrecy keeps the uncertainty going.
The US corporate bond market can't recover until he stops interfering in that market, the protectionism can't stop until all the loans are disclosed.
Good for Taiwan...
I'm glad that the Taiwanese government is willing to step up like this and is not just writing a blank check to give to these companies, unlike what the US has done.
However, I'm curious, is the US the only country that has written a blank check to the banking industry, or are there other countries that have followed the same "business plan"? What about transparency, have other countries who have given aid to their financial economy been open about where the money is going?
Government taking over such a huge stake...
The government of Taiwan taking over such a huge stake in the computer industry is not a good thing for the world's computer industry.
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