For all the talk about increased transparency in our financial
markets, we discover the emperor has no clothes. By making
risky investments, 85-year old brokerage firm Bear Stearns
was left with only empty jacket pockets over the weekend.
Gallows Humor at Bear Stearns by Kristina Cooke (Reuters)
Bear Stearns Chairman Cayne Played Cards Amid Crisis (Reuters)
Vanished into Thin Air- A Plonker’s Lament (Reuters)
All the more reason why something needs to be done about white collar crime. Those clowns are rewarded millions for destroying their employees lives while the dealer on the corner gets life.
Seraphine: I can’t tell you on the journalism side of what I do how many times I’ve e-mailed my Editor In Chief and told him, “We missed our calling. We should have been crooks who make millions for taking airlines into Chapter 11, slashing wages by 30-50% and paying themselves bonuses when they emerge. It galls me to no end!
I adviced an operation on Lehman Brothers months ago and now it’s turning out that is completely wrong… Well, no one could really know since it seems that just the CEO and his friends do know what the real situation is.
And they call this transparency on markets…
My heart breaks for the drones of these companies. For the queenbees, not so much. They’re still crying all the way to the bank.
This is really a cool website!
Yes, the rich always get richer (or lose less). The housing mortgage bubble came on the heels of the dot com bubble and if my investigations tell me anything, watch out for the green tech bubble next. Billions and billions of dollars rapidly sunk into stocks that make the owners, directors and large investors rich – on speculation and non-real growth. Then it tumbles and ordinary people lose their homes, their retirement funds, their savings. Capitalism rocks!
What is most puzzling to many is the idea of lack of accountability in the whole of the sub prime fiasco of which Bears Stears was a key player.
It involved at least 3 essential ingredients, each being interdependent upon the other for its continuance.
eg
Lenders didn’t care who they lent money and the ability to repay providing it was backed up by real estate. They didn’t care about any obligation to pay it back. This is foreign type of thinking to most.
A large number of borrowers were equally reckless and didn’t care about the financial implications and give any thought as to the repayment or the contract they were signing, read it and realise its onerous future outcomes , or alternatively presumably went along with the guise. This is also foreign type of thinking to most, how many were genuinely misled is very hard to tell.
Large measures of fraud and greed was necessary on a scale sufficient to fuel the fire and provide its continued lifeblood. The sub prime fiasco has spead its misery to the rest of the world and has been largely responsible for the current credit crunch and market meltdown.
There has been an unprecedented movement of wealth to the top 1% in the US, particularly in the past 10 years.The taxation system is skewed towards the wealthy and in my view needs urgent review; disappointedly there is very little debate on this factor at this point in time.
But in realtion to the rescue package and interesrt rate reduction annonced to day once again I don’t think the Fed had any other option, considering the 2 bad outcomes, undoubtedly it was best not to allow the company to go to the wall as it would compound and further exasperate panic and compound an aleady rickety credit crunched economy.
Best wishes