Bear Stearns Fails - Bailed out by FED Reserve for 28 days

Politricks!

Ooops, sorry! I wasn't trying to make a political point here, although I see how it could come off that way.

I'm really trying to understand what is happening. I get healthcare economics, because they have no real relationship to broader economic free markets. Healthcare economics is politics. Free markets would only seem to work if the regulation to safety net ratio is roughly equivalent, right? All reward, no risk would create an endless succession of bubbles. Greenspan's article just seemed so blatantly "I'll have the parts of Miltonian models and regulated models that most benefit the wealthy, please," that I assume I am missing something.

What I was asking is -- does everyone concur with Greenspan? and if so, what am I missing? is there some economic theory I need to read up on because my reading of this is so pitifully naive? Or is Greenspan a megalomaniac who is trying to preserve his legacy despite clear signs that he decided to quit playing musical bubbles when he decided he wouldn't have enough chairs when the music stopped playing this time?

Greenspan is full of crap. Just a week or so ago he was in the Mideast telling them to dump the dollar.

You may think I am a crackpot but I think this is exactly what they (the Fed) want to happen.

http://english.aljazeera.net/NR/exeres/FC515689-75CC-4121-BD37-2A84E5BF0C60.htm

http://www.funnymoneyreport.com/

Was not dissing you punzy. It IS politrics. It is as old as the "system" to manipulate things to the good of somebody.

The whole mess is confusing. So many things happen behind the scenes, the the Greenspans get up and say all of this horrific BS and expect us to think it is truth. It ain't!!

Fortunately, our system of checks and balances sort of works, but it all goes to show that individual greed (political, financial, power, political, ego, etc) can be fed.

"We're in a crash''

March 17 (Bloomberg) -- Joseph Granville and Robert Stovall, octogenarians who've seen every financial market downturn since the 1950s, say the current one may be the worst and is far from over.

Granville, born in 1923, remembers his banker father's bad moods following the stock-market crash of 1929. The younger Granville began his career at defunct brokerage E.F. Hutton in 1957, quit in 1963 to begin publishing a weekly newsletter and wrote nine books on investing.

``We're in a crash,'' Granville, 84, said in a telephone interview from Kansas City, Missouri, where he lives and works. ``This is the worst I've seen, and I've studied every bit of history all my life.''


http://www.bloomberg.com/apps/news?pid=20601087&sid=aMVeMY2hvYUI&refer=home

Am I oversimplifying? Is there something I'm missing?

If you are, then I am too, because I agree with your analysis of "free markets." But you may find out that many people would just rather not have the obvious pointed out. Denial is a river, isn't that what they say?
Thanks for your post.

Re: "We're in a crash''

March 17 (Bloomberg) -- Joseph Granville and Robert Stovall, octogenarians who've seen every financial market downturn since the 1950s, say the current one may be the worst and is far from over.

Granville, born in 1923, remembers his banker father's bad moods following the stock-market crash of 1929. The younger Granville began his career at defunct brokerage E.F. Hutton in 1957, quit in 1963 to begin publishing a weekly newsletter and wrote nine books on investing.

``We're in a crash,'' Granville, 84, said in a telephone interview from Kansas City, Missouri, where he lives and works. ``This is the worst I've seen, and I've studied every bit of history all my life.''


http://www.bloomberg.com/apps/news?pid=20601087&sid=aMVeMY2hvYUI&refer=home

Joseph Granville was/is a con artist.

Re: "We're in a crash''

Joseph Granville was/is a con artist.

?????????????

Pray tell

?????????????

Re: "We're in a crash''

?????????????

Pray tell

?????????????

From Wikipedia:

Joseph E. Granville (born August 20, 1923), often called Joe Granville, is a financial writer [1] and investment speaker. He popularized [2] the use of "on balance volume", a technique of technical analysis that attempts to predict future prices of stocks, commodities, and other financial assets traded on financial markets for which historical price and volume information is available.

Granville is probably best known for his bearish market calls during the 1970s, 1980s, and 1990s, when he claimed that the stock market was headed for imminent collapse. His overall track record, according to the Hulbert Financial Digest, is very poor.

The Granville Market Letter "is at the bottom of the Hulbert Financial Digest's rankings for performance over the past 25 years - having produced average losses of more than 20 percent per year on an annualized basis." [3]

Nevertheless Granville was known as a great showman [4] who would emerge from a coffin at an investment conference, or appear to walk across water (at a swimming pool) when meeting clients. According to Robert Shiller in his book Irrational Exuberance[5]

His investment seminars were bizarre extravaganzas, sometimes featuring a trained chimpanzee would could play Granville's theme song "The Bagholder's Blues," on piano. He once showed up at an investment seminar dressed as Moses, wearing a crown and carrying tablets. Granville made extravagant claims about his forecasting ability. He said he could predict earthquakes and once claimed to have predicted six of the past seven major world quakes. He was quoted by TIME Magazine as saying "I don't think that I will ever make a serious mistake in the stock market for the rest of my life," and he predicted that he would win the Nobel Prize in economics.

Yet, Shiller states that Granville's market calls were said by major media sources to have caused large moves in the Dow Jones Industrial Average on April 22, 1980 (+4.05%) and on January 6, 1981.

Joseph Granville was/is a con artist.

So is "W", but some people still listen to him.


I might add that only a few months ago, those who claimed
a recession was imminent were few.


Now they are many.


And last week the book value of Bear was $80.00/ share

So is "W", but some people still listen to him.


I might add that only a few months ago, those who claimed
a recession was imminent were few.


Now they are many.


And last week the book value of Bear was $80.00/ share

This analogy doesn't make sense ... unless you think we should be listening to what W has to say. I don't think Granville has the power to "move markets" anymore.

There is a big difference between saying "this is a recession" and "this is going to be the worst market crash of all time." Hyperbole doesn't help anyone, except maybe headline writers.

Re: "We're in a crash''

Joseph Granville was/is a con artist.

totally agree. him AND his midgets !!

This analogy doesn't make sense ... unless you think we should be listening to what W has to say. I don't think Granville has the power to "move markets" anymore.

There is a big difference between saying "this is a recession" and "this is going to be the worst market crash of all time." Hyperbole doesn't help anyone, except maybe headline writers.

If things are going so well, why is the Fed considering this:

"The Fed may also decide as early as tomorrow to start outright purchases of mortgage-backed securities, said Vincent Reinhart, former director of the Fed's monetary-affairs decision. Some investors have been clamoring for the Fed to make such a move, and the recent measures fell short of that step."

http://www.bloomberg.com/apps/news?pid=20601068&sid=a8JhRTZjidh8&refer=home



Since this is only a recession, certainly you will not mind having YOUR
tax dollars so utilized.

If things are going so well, why is the Fed considering this:

"The Fed may also decide as early as tomorrow to start outright purchases of mortgage-backed securities, said Vincent Reinhart, former director of the Fed's monetary-affairs decision. Some investors have been clamoring for the Fed to make such a move, and the recent measures fell short of that step."

http://www.bloomberg.com/apps/news?pid=20601068&sid=a8JhRTZjidh8&refer=home



Since this is only a recession, certainly you will not mind having YOUR
tax dollars so utilized.

Where did you read in TFT's post you quoted that "things are going so well"?

"...Where did you read in TFT's post you quoted that "things are going so well"? ..."



A recession would be "good news" compared to the other
possibilities/probabilities.

The Fed has taken several extraordinary measures over
the past few weeks, and is considering even more.

An "ordinary" recession would never justify such measures.

"...Where did you read in TFT's post you quoted that "things are going so well"? ..."



A recession would be "good news" compared to the other
possibilities/probabilities.

The Fed has taken several extraordinary measures over
the past few weeks, and is considering even more.

An "ordinary" recession would never justify such measures.

I must have been unclear.
Where did you read in TFT's post you quoted that "things are going so well"?

edited*The reason I ask is because when you do come and post you copy and paste ad nauseum and the above is reflection of your reading comprehenison....you are suspect*

I must have been unclear.
Where did you read in TFT's post you quoted that "things are going so well"?

Thank you!

"...Where did you read in TFT's post you quoted that "things are going so well"? ..."



A recession would be "good news" compared to the other
possibilities/probabilities.

The Fed has taken several extraordinary measures over
the past few weeks, and is considering even more.

An "ordinary" recession would never justify such measures.

All I am saying is I am not going to take the word of an old guy who has spent his professional life looking for attention and is jumping at the chance to get more of it now. You have to find a better "sky is falling" source than that.

That said, like Punzy I have limited economic expertise, but this how things look to me:

1) We don't have enough oil for independence, we don't make that much stuff anymore, so about the only thing Americans have offered the world lately (besides our military force) is the willingness to purchase a bunch of stuff.

2) Americans aren't buying as much stuff anymore and will soon be buying even less.

3) Dollar is falling as our economy loses value because consumers aren't propping it up.

4) A whole lot of the stuff in item 1 was bought on credit.

5) Less buying power means less of an ability to pay people back.

What happens from here on out is anyone's guess, but I don't have confidence in the Fed. What stinks is I was trying to figure out today the best way to ride it all out (besides getting rid of debt). Cash reserves are great but if the Fed is pumping $ in, isn't it silly to hold on to cash since inflation is inevitable? The fate of the S&P 500 is questionable, buying gold seems dumb because it's already gone up so much, no one wants to buy real estate. I'm not sure about bonds or international funds. We have some of each. (Individual stocks are not our thing -- we have nowhere near enough time to research and keep up with them.)

I'm glad I'm not retiring in 5 or 10 years, but in deciding whether we should make any changes, we decided to just let it ride out. Which really doesn't seem that smart, but oh well.

Thank you!



All I am saying is I am not going to take the word of an old guy who has spent his professional life looking for attention and is jumping at the chance to get more of it now. You have to find a better "sky is falling" source than that.

That said, like Punzy I have limited economic expertise, but this how things look to me:

1) We don't have enough oil for independence, we don't make that much stuff anymore, so about the only thing Americans have offered the world lately (besides our military force) is the willingness to purchase a bunch of stuff.

2) Americans aren't buying as much stuff anymore and will soon be buying even less.

3) Dollar is falling as our economy loses value because consumers aren't propping it up.

4) A whole lot of the stuff in item 1 was bought on credit.

5) Less buying power means less of an ability to pay people back.

What happens from here on out is anyone's guess, but I don't have confidence in the Fed. What stinks is I was trying to figure out today the best way to ride it all out (besides getting rid of debt). Cash reserves are great but if the Fed is pumping $ in, isn't it silly to hold on to cash since inflation is inevitable? The fate of the S&P 500 is questionable, buying gold seems dumb because it's already gone up so much, no one wants to buy real estate. I'm not sure about bonds or international funds.

I'm glad I'm not retiring in 5 or 10 years, but in deciding whether we should make any changes, we decided to just let it ride out. Which really doesn't seem that smart, but oh well.

Your fixed debt is in dollars (I assume) and so is the cash you hold. It is a wash. Can anyone comment on TIPS? Assume we remain solvent as a nation in the response because if not it won't matter.

Can anyone comment on TIPS? Assume we remain solvent as a nation in the response because if not it won't matter.

Assuming that the nation remains solvent; assuming that you hold them in a tax-deferred retirement account; assuming that the government-reported CPI isn't a fairytale; and assuming your portfolio's asset allocation and diversification are neither too aggressive nor too conservative for your age--they're OK.
.

Thank you!



All I am saying is I am not going to take the word of an old guy who has spent his professional life looking for attention and is jumping at the chance to get more of it now. You have to find a better "sky is falling" source than that.

That said, like Punzy I have limited economic expertise, but this how things look to me:

1) We don't have enough oil for independence, we don't make that much stuff anymore, so about the only thing Americans have offered the world lately (besides our military force) is the willingness to purchase a bunch of stuff.

2) Americans aren't buying as much stuff anymore and will soon be buying even less.

3) Dollar is falling as our economy loses value because consumers aren't propping it up.

4) A whole lot of the stuff in item 1 was bought on credit.

5) Less buying power means less of an ability to pay people back.

What happens from here on out is anyone's guess, but I don't have confidence in the Fed. What stinks is I was trying to figure out today the best way to ride it all out (besides getting rid of debt). Cash reserves are great but if the Fed is pumping $ in, isn't it silly to hold on to cash since inflation is inevitable? The fate of the S&P 500 is questionable, buying gold seems dumb because it's already gone up so much, no one wants to buy real estate. I'm not sure about bonds or international funds. We have some of each. (Individual stocks are not our thing -- we have nowhere near enough time to research and keep up with them.)

I'm glad I'm not retiring in 5 or 10 years, but in deciding whether we should make any changes, we decided to just let it ride out. Which really doesn't seem that smart, but oh well.

Buy euros

"..The reason I ask is because when you do come and post you copy and paste ad nauseum and the above is reflection of your reading comprehenison....you are suspect..."





No


The reason you ask is because you have always enjoyed
word games.

And as I have stated before, I can always elicit a post from
you whenever I want one.

"...All I am saying is I am not going to take the word of an old guy who has spent his professional life looking for attention and is jumping at the chance to get more of it now. You have to find a better "sky is falling" source than that...."



Ok



That said, like Punzy I have limited economic expertise, but this how things look to me:

1) We don't have enough oil for independence, we don't make that much stuff anymore, so about the only thing Americans have offered the world lately (besides our military force) is the willingness to purchase a bunch of stuff.

2) Americans aren't buying as much stuff anymore and will soon be buying even less.

3) Dollar is falling as our economy loses value because consumers aren't propping it up.

4) A whole lot of the stuff in item 1 was bought on credit.

5) Less buying power means less of an ability to pay people back.

What happens from here on out is anyone's guess, but I don't have confidence in the Fed. What stinks is I was trying to figure out today the best way to ride it all out (besides getting rid of debt). Cash reserves are great but if the Fed is pumping $ in, isn't it silly to hold on to cash since inflation is inevitable? The fate of the S&P 500 is questionable, buying gold seems dumb because it's already gone up so much, no one wants to buy real estate. I'm not sure about bonds or international funds. We have some of each. (Individual stocks are not our thing -- we have nowhere near enough time to research and keep up with them.)

I'm glad I'm not retiring in 5 or 10 years, but in deciding whether we should make any changes, we decided to just let it ride out. Which really doesn't seem that smart, but oh well. [/QUOTE]







But your statements above sure look like a "sky is falling" scenario to me.

??


"Riding it out" may work.


Did not for Bear stockholders, however

Buy euros

Euros? I don't know if that is a good idea. I would buy gold or silver coins. I look for gold to go to $1600.00 easy by the end of the year.

Now Bear shares are rising:

http://dailybriefing.blogs.fortune.cnn.com/2008/03/18/why-bear-stearns-stock-is-in-orbit/


"Why is Bear Stearns (BSC) up nearly 70% Tuesday, to a price about $6 a share above its $2-a-share buyout agreement with JPMorgan Chase (JPM)? "

All:

I'm going to go out on a limb here and call the market bottom. The S&P500 hit the low for the year on March 10. In six months we will test the highs achieved in 2007.

In my mind, the Bear Stearns implosion has signalled a bottom.

Little Fish

Now Bear shares are rising:

http://dailybriefing.blogs.fortune.cnn.com/2008/03/18/why-bear-stearns-stock-is-in-orbit/


"Why is Bear Stearns (BSC) up nearly 70% Tuesday, to a price about $6 a share above its $2-a-share buyout agreement with JPMorgan Chase (JPM)? "

Two reasons:

(1) When they originally "Dropped a Deuce" on Bear, it was an exchange for a set fraction of a share of JPM stock (in the amount of $2) for a share of BSC--now that JPM stock is going up, that fraction of a share is also going up in price.

AND

(2) There's rumblings that Bear employees and deep-pocket Bear shareholders are going to vote "No" to the takeover and are threatening to get legal help to pick apart the "$2 Deal" that took place between "W," Hank, Ben and JPM behind closed doors.

The fat lady hasn't entered the stage yet on this.


.