Jim Rogers on the Bear Stearns bailout.....

The current market has some similarites of what happen in 1970s.

Psychology rules the markets,always. Inflation expectatios have produce "hope" that all sectors will do well. However "hope" is never a good investment tool.
Current market actions is pretty fast as psychology swings. And normally, no stock market can rally far without the banking stocks.
Currently Bernake is doing something similar like what happen in late 1970s where he expanded the amount of so-called cheap currency. People will borrow and use stocks as inflation hedges - yes stocks will rise.
Commodities prices will go higher and when inflation reach a all time high. Economy will plunged from the cliff. Deflation will follow. By allowing inflation to go higher, the US deflicit directly will be reduced (SGD to US was 1.70 and now 1.38).
Now the question is whether inflation forces is more powerful than the deflationary forces of collapsing credit. It seems collapsing credit is faster for now. Not taking too much risk, look around for high yield stocks or stocks you understand well enough.

Ahead market still look pretty bearish for now and at least for months.

Jim Rogers on the Bear Stearns bailout......
Jim Rogers was none too pleased with the way the U.S. government has been throwing its money around.

On why Bear Stearns was bailed out:
You know the reason they did it this way was because, if Bear Stearns had to declare bankruptcy, you'd realize that Bear Stearns paid out billions of dollars in bonuses in January - six weeks ago. If he let them go into bankruptcy, they all would have had to send back their bonuses.This is what they're doing, they're doing it so they don't have to give back their bonuses. That's why they didn't put them into bankruptcy. Jamie Dimon has gotten a great deal because the Federal Reserve is paying for it. The Federal Reserve is using taxpayer money to buy a bunch of Bear Stearns traders' Mazeratis.

On letting banks fail:
Investment banks have been going bankrupt since the beginning of time. What are you talking about? Let somebody go bankrupt - it's not the end of the world. You remember what happened in the 70s when they tried this tactic -when Arther Burns kept printing money. Finally, interest rates had to go to over 20 percent and they had to bring in Paul Volcker who had to take draconian measures and put the country into a serious recession. How much more money do you think the Federal Reserve has?

On risks to the banking system:
In 1966, the entire Japanese financial community went bankrupt. Every broker in Japan was in bankruptcy. Japan came out of that and became one of the great powerhouses of the world. In 1907, everbody on Wall Street was bankrupt. America recovered from that and had a very nice future. Are you telling me that we're never going to have bankruptcies in the financial community again?

On Alan Greenspan's role in this mess:
The first two central banks in America failed. Between Greenspan and Bernanke - they're setting up the failure of the central bank. The demise of the Federal Reserve. The first two failed, this one is going to fail too -because of Greenspan and Bernanke. Greenspan laid the perfect foundation for Bernanke.