1. Public opinion: People are pissed that they lost a ton of money. They're mad at the government. Now they will think he's a nice guy.
How could this be possible???
2. Self-fulfilling prophecy: Think of it this way. If the king offers to absorb losses and a ton of people buy into the Bourse, the price is not going to go down. There will be no losses to absorb. It's kind of like the FDIC. The gov't could never actually make the payments if the banking system collapsed, but people feel reassured which prevents runs on banks and the type of collapse people saw in 1929. So the promise prevents the conditions that would cause them to make good on it in the first place.
3. Foreign investors will flow in: If you understand number two, what's to stop you from getting in? He's counting on an inflow of foreign money, further bolstering reason number two.
Are you sure that is a real king? He has an Aunt Jemimah bandana held on by a large black gasket for a crown. And when did kings start sporting "soul patches" on their royal chins?
But, count me in. I'm moving to Saudi to become a peasant so, I too, may invest risk free! (I hope peasants make alot of $$ so I'll have some excess income to invest.) :