Bear Stearns and the continued demolition of the US economy

[Jon Abbey]

JP Morgan agreed to buy the whole company for $2/share today, a company that was over $85 three weeks ago and over $170 in February 2007. it continues to defy logic how poorly the US economy has been run over the last decade or so, by both the federal government and the Fed. Greenspan should be sent to jail, or somehow punished painfully, it's unconscionable how he let this go on on his watch.

[Jon Abbey]

the dollar is currently down to 97.5 yen (123 yen last summer) and $1.57 to a euro ($1.33 last summer).

[Paul B]

The Fed certainly has a hand in the mess, and you're right that Greenspan seems to have walked away unscathed. As for Bear Stearns, it has always played by its own rules; the collapse of two of its hedge funds more or less kicked the current mess into high gear. Jamie Dimon has for some time now been the unsung genius of the Street—Sandy Weill, who fired him from Citi, looks a little lame these days with that bank on the brink of god-knows-what—and so JPM's play here with Bear is a coup, and another feather in Dimon's cap.

Meanwhile Bush just stands on the sidelines grinning like an absolute idiot, telling us how crucial it is to keep his tax cuts alive in the midst of a market meltdown and a $2 trillion war. Is there anybody still standing by this fool?

[Gary Sisco]

Thing is, the Fed's role is supposed to be controlling inflation -- not propping up the market.

[Darryl G. Thomas]

Paul B. must have caught Bush's performance last Friday. The cat's joking with Paul Gigot and talking about Congressional earmarks. What the hell does Congressional earmarks have to do with anything.

I'm surprised he didn't do a little tap dance like he did a week ago while waiting for McCain to show up.

Could the guy at least pretend to be concerned? It's like he can't wait for that last plane ride to Crawford on Air Force One.

[Root Doctor]

Originally Posted by Jon Abbey

Greenspan should be sent to jail, or somehow punished painfully, it's unconscionable how he let this go on on his watch.

Even being married to the heinous Andrea Mitchell doesn't seem like a rough enough punishment for Greenspan. My fear is that we're just seeing the tip of a very large iceberg in the financial industry.

[Gary Sisco]

Your fear is entirely rational, Roots.

[Darryl G. Thomas]

Root, I think Alan got the better of that deal. Andrea's no looker, but Greenspan's about 100.

Greenspan will never, never, ever, own up to his own part in this mess.

[Gary Sisco]

This mess and also the recession previous, which is nearly forgotten.

Any time the Fed starts acting other than to control inflation, it just adds to the problem. It can't do anything else. The market won't be able to correct itself if the pain isn't felt. As it is, of course, as usual, it will be felt regardless by "ordinary people."

[Root Doctor]

Originally Posted by Darryl G. Thomas

Andrea's no looker

Darryl, she's so homely she hurts my feelings. Talk about having a face for radio...

[Uli]

[Darryl G. Thomas]

Root, Andrea and Ed Bradley used to, ahem "date" back when they worked in Philly back in the day. She must have had something going on because Ed was the coolest dude on TV.

[Root Doctor]

Originally Posted by Darryl G. Thomas

Root, Andrea and Ed Bradley used to, ahem "date" back when they worked in Philly back in the day. She must have had something going on because Ed was the coolest dude on TV.

Did Ed have a serious drug and alcohol problem at the time?

[Gary Sisco]

Nah, he'd have had a NT Times best seller about it, if he had.

[rollhead]

Originally Posted by Root Doctor

Did Ed have a serious drug and alcohol problem at the time?

Does being a fan of Wynton Marsalis count?

[jesus marion joseph]

Originally Posted by Root Doctor

Darryl, she's so homely she hurts my feelings. Talk about having a face for radio...

I'm pretty sure NASA could find a missing landing module or two in those craters.

[Darryl G. Thomas]

j.m.j.,

I've done worse. There was this time in Udon-Thani, Thailand...

Well, I don't want to get into that.

[rollhead]

What's with Jim Cramer and Bear Stearns?

On Friday, March 14, 2008, on his CNBC Show "Mad Money", when asked whether people should be worried about Bear Stearns in terms of Liquidity and whether investors should get their money out, Jim Cramer replied "No, No, No" and "Bear Stearns are not in trouble". The following Monday, BSC shares dropped more than 85%. Many on the Yahoo finance forums have requested that CNBC fire Cramer

[Jon Abbey]

isn't his show after the market closes anyway? nothing those people could have done at that point no matter what he said...

[clinthopson]

Once this is all over, Congress has to reenact Glass-Steagle. The deregulation of the financial industry took down the Chinese walls between banking, insurance and Wall Street.

Once Wall Street got into the arena, the usual greed and recklessness that is Wall Street took over and the usually conservative practices of banks and insurance companies went by the wayside.

I am not optimistic about the pols having enough guts to do anything about it until the whole house of cards collapses.

[rollhead]

http://www.nytimes.com/2008/03/17/bu...15f&ei=5087%0A

[Darryl G. Thomas]

Here is what I recall hearing on the radio concerning Bear Stearns. That while it was in trouble because of the sub prime mess, many economists felt it wasn't fatal. However, once folks started getting nervous, a run on the bank began. The run was unexpected (because our money manager class is so wise and calm).

Cramer was probably touting the company line.

[Gary Sisco]

What they're going to find out is that capitalism can't be managed by the quarter year. It would be evident to anyone else, by now. It will become evident to them in a generation or two, maybe.

Money and brainpower don't track together, necessarily. Far from necessarily.

[Darryl G. Thomas]

Gary,

No it won't. Remember back in the late '80s when Japan was really kicking our asses in business and everyone said it was because of their business model and its reliance on long range planning and goals?

Everybody acknowledged that one of the problems with American business was their quarter to quarter philosophy and that it had to change.

Well, 20 years later what do we have? The same old same old.

[Jon Abbey]

the most fundamental problem is still the ongoing massive deficits the government runs each and every year.

[Al in NYC]

Originally Posted by clinthopson

Once this is all over, Congress has to reenact Glass-Steagle. The deregulation of the financial industry took down the Chinese walls between banking, insurance and Wall Street.

Once Wall Street got into the arena, the usual greed and recklessness that is Wall Street took over and the usually conservative practices of banks and insurance companies went by the wayside.

I am not optimistic about the pols having enough guts to do anything about it until the whole house of cards collapses.

Isn't that the truth. We once had the means to regulate these people, and a law in place specifically to stop the kind of cascade of collapse we now seem on the brink of, and we pissed it all away just because they said "trust us" (even with all historical evidence to the contrary) and put a pittance out of their fortunes into politicians' pockets. Thoroughly idiotic, and now we're all going to pay for it.

[Uli]

I have lost a bit on my economics 101 but the trade deficit may be a similarly hugeproblem. Isn't this getting worse with the weak dollar?

exports of course would profit from the weak dollar. I just don't know that we manufacture anything to export anymore.

Maybe some of the free marketers here will chip in.

[Root Doctor]

The huge amount of consumer debt isn't helpful.

[Jon Abbey]

yeah, obviously there are quite a few problems. the government's not caring about the increasing weakness of the dollar until recently (if even now) is another. did they not realize that oil is priced in dollars? it just defies belief how poorly this country has been run for the last decade or so.

[Darryl G. Thomas]

Jon,

The root is greed, which leads to a daisy chain of greed and mismanagement.

To begin with, there was a time when you couldn't get more house than you could afford. Sub prime lending looks like variation on the old Ponzi scheme. Throw in a dash of cheap credit and scant regulation and... BAM!

It's like a computer virus replicating itself through out the system. Now we've oil prices skyrocketing because of the falling dollar that keeps falling because of high oil prices.

Best news story: Bush goes to the Saudis (our friends who've we've kept safe with our military), begging for them to lower oil prices and they give him the finger because under his watch our economy's grown so fucked.

If I weren't paying $3.20 for a gallon of gas I'd laugh.