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Posted by Society on March 17, 2008, 7:26 pm
>
> CNNMoney.,com asked "Are Fed rate cuts
> and the Bear Stearns bailout helping or hurting
> the economy?"
>
http://money.cnn.com/2008/03/17/markets/thebuzz/index.htm?postversion=2008031711
The writer of that article isn't just another pretty face,
he's got a bachelors degree in {drum roll} psychology.
See Paul R. La Monica's official CNNMoney.com bio at:
<http://www.timeinc.net/fortune/information/presscenter/cnnmoney/bios/CNN_LaMonica.html>
Hmmpf!
Some money expert, eh?
> and got blistering feedback at
>
http://cnnmoneytalkback.blogs.cnnmoney.cnn.com/2008/03/17/big-bailouts-the-real-march-madness/
>
> Here's a sampling: [...]
My favorite among all those responses you posted
for us, Viking, is this one:
> Are Fed rate cuts and the Bear Stearns bailout helping
> or hurting the economy?
>
> The Fed rate cuts are nearing their end: they will stop
> at 2%, which is 0% real interest rate, probably
> by the end of June. Then, we wait.
>
> The Bear Stearns situation is hardly a bailout: the stock
> went from $159 to $2 in less than a year. The company
> has been punished enough. By facilitating the transfer
> of Bear assets and liabilities in total to JPMorgan,
> the Fed is just giving Bear a 'Christian burial'. RIP, Bear.
>
> This sends a powerful message to the other investment
> banks to clean up their acts quickly.
>
> It would not be surprising to see one or a few more
> of these, but it looks like we're almost done here.
>
> Posted By Mike, Redwood City, CA : March 17, 2008 12:28 pm
IMO, Mike was far more perceptive than most of the
other commenters. He noticed that the question posed
by the CNN newshounds was pregnant with a false
premise, that Bear Stearns had a "bailout". Gee,
if ever I have a stock sold out from under me at a
98.5% loss ($147/share to $2) I'll know that I'm
supposed to be pleased that I was "bailed out"
according to Time and its subsidiary CNN. (Sheesh.)
I expect there will be lawsuits from disgruntled
Bear Stearns shareholders over J.P. Morgan's
$2/share takeover of Bear Stearns (a firm whose
book value was recently estimated to be $84/share)
that will be winding through the courts for a decade
or more. The deal sure looks sweet for J.P. Morgan
tho'. The US central bank guarantees Morgan
against any losses if Bear Stearns' assets really do
turn out to be sour and Morgan gets to keep all the
gains if the assets end up in the black (which I
expect will be the case once all is said and done).
You've probably been following all this, Viking,
but for those who haven't, see:
J.P. Morgan Buys Bear in Fire Sale,
As Fed Widens Credit to Avert Crisis
by Robin Sidel, Dennis K. Berman, and
Kate Kelley
_The Wall Street Journal_
March 17, 2008; Page A1
<http://online.wsj.com/article/SB120569598608739825.html>
Now, lemmee go look and see how JP Morgan Chase
stock did in Monday's trading...
--
I have enough money to last me the rest
of my life. Unless I buy something.
"lnthomp" commenting on "ABC's 'Sic' Choice
Suggests Belief in Afterlife an Error"
_NewsBusters_, January 1, 2007; 21:02
<http://newsbusters.org/node/9898>
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