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A conversation about Bear Sterns and the economic crisis with Kate Kelly, author of "Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street" and William D. Cohan, author of "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street"
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citizenschallenge 06/01/2009 10:55 PM Report
You know all of our recent Wall Street/Washington financial news has an air of fantasy about it.
With steadfast focus the powers-that-be & our media refuse to examine the real problems that are barreling down at us.
Allow me to share from a recent essay:
"Our planet’s “environment” which right wingers continue to hold in the utmost loud mouthed contempt ~ even though it is undeniably Earth’s life support system ~ is a tattered, and aged before her day, remnant of what the great explorers discovered barely two centuries ago.
Yet, we refuse to look at what that degradated biosphere means for our children's future, instead pretending the economy runs purely on buying, trading and financial voodoo.
All the while, the mounting, foreseeable challenges our children will be facing continue to be ignored in favor of wasting our precious time with imbecilic ideological battles, rather than rationally looking at this new world we are creating out of our own collective avarice. "
http/::citizenschallenge.blogpot.com
tartufe 06/01/2009 02:23 PM Report
The more I read "House of Cards," the more Geithner and Paulson come off as obtuse villians. Geithner says Bear Stearns collapse would cause lower incomes, lower home values, higher buying costs for housing (int rates?), education, other living expenses, lower retirement savings and rising unemployment.
Well, DUH, they bailed them out and we STILL have all those itemized down sides he listed; PLUS trillions of debt as a legacy for untold generations to boot.
Human and economic fallacies seem to have immutable consequences. Trying to "paper (money)" over them has proven this. Geithner, Paulson, Bernanke et al pseudo wise-guys have managed to extrude a generational problem into too many generations to know for our progeny.
Obama has been coopted as well. So goes the empire. Maybe it's just as well - we're botching that role as well.
sachiko5514 05/30/2009 08:59 AM Report
I don't have much knowledge of economy.I mean I am not good at difficult
theory.
However, I can't stop thinking of relation between historical events , people's
mental condition,politics and economic states.
For example, when the economy becomes weaker,we will consider the reason of it and have to make strategy. If we repeat the activity of why & answer,
what is our final answer?
Isn't it like "Which one is first,eggs or hens?"(Japanese saying)
What a stupid my comment is! I think by myself,but interesting point.......
Fed_Insider 05/29/2009 11:24 PM Report
In this environment my trust would start with the cynics.
tartufe 05/29/2009 10:50 PM Report
From "House of Cards" again, someone (still unknown to this day) made a $1.7 million bet that Bear Stearns would plunge within nine days by buying 57,000 puts at $30 and 1,649 puts at $25.
Whomever this was was either an insider or was privy to insider information. A trade of this size has to be traceable. Reeks of complicity. Like I said before:
MORAL HAZARD = EMPTY JAIL CELLS!
REMant 05/29/2009 10:08 PM Report
I've heard Cohen on this once or twice before. His thesis that the change from private to public ownership is central seems undeniable, but, of course, as I'm sure he well knows, the easy mortgages and easy money is what fueled the securitization business, and so the Fed, Fannie Mae and Freddie Mac are also culpable. Easy money, of course, fuels the mergers and acquistions business and the rise in stock and other asset prices, as well. Publicly-owned firms have to be regulated in some fashion for much the same reason we have governments to deal with public goods and externalities. Private firms do not, I agree, unless they are banks, or investment houses, which amounts to public ownership. For mkts to discipline themselves it is necessary for action and consequence to fall on the same entity, not shifted or absolved. Moral hazard means we can't expect to have a no-fault society. Not everything in life can be accidental or someone else's fault. People have to be encouraged to use their heads. It doesn't follow BTW that punishing them after the fact will necessarily accomplish that end.
tartufe 05/29/2009 07:02 PM Report
Cogent post Roth. The putter of puts? Try this for (admitted) skepticism. Insider trading (of sorts), officers, functionaries and bureaucrats of the Office of the Comptroller and Currency(OCC)(and of course the SEC).
In the book, "House of Cards," the OCC made calls to Bear's potential counter party funders that accelerated Bears stock plunge. The OCC conspiracy(?) complicit with vulturistic hedge funds assured the success of short-term puts.
The FBI should investigate all market activity by any and all employees of the OCC and the SEC at the time.
MORAL HAZARD = EMPTY JAIL CELLS!
Roth 05/29/2009 03:23 PM Report
Why after a year has the SEC not identified who shorted Bear so aggressively using puts just about to expire? The odds of that succeeding were so small as to raise reasonable suspicions of insider trading. Is it really so hard to trace the purchases of those puts?? I would think that only for monkeys would it end up being so difficult to do, but then...