Bear Stearns Racing Toward Selling Itself to JPMorgan ( Fed driving the deal before Asia Mkt opens)

Lehman Bros.

Well, here's some of the latest "poop" from the MSM!!!

I just got back from a Navy Blue Angels air show in Sacramento, so find this alarming. Hopefully this will help the market find it's "bottom" without plumbing too deep of depths first.

Asia Times has an archive of Mr. Liu's writings:

The Complete Henry C K Liu
Mar 17, 2008

Don’t think so.

It was in the news last week, some bank may pick them up , maybe it was Bank of America. Bernake said banks will be failing. We went through this in the late 80’s early 90’s.
It happens. Some fail to save for a rainy day, eat steak and champaign every night.

This is a marked indication of looming financial disaster.The Fed bailing out one financial company means they just printed money it and they will print it for their buddies again and again. Stern collapsed tonigkt and went for pennies to Chace bank and the FED dropped the discount rate TONIGHT!!! SUNDAY NIGHT!! The sockmarket will lock down tommorrow and the safety shut down will hit at a 20% decline. This is total disaster.

Which brother?

Glad you are back....not sure what is going on....I just discovered Mr. Liu....another of his articles:

Page 1 of 3
Why the subprime bust will spread

********************EXCERPT************************

Years ago when the US debt bubble spread over to the housing sector, warnings from many quarters about the systemic danger of subprime mortgages were categorically dismissed by Wall Street cheerleaders as Chicken Little "sky is falling" hysteria. Even weeks before bad news on the housing finance sector was shaping up as a clear and present danger, adamant denial was still loud enough to drown out reason.

Both Federal Reserve chairman Ben Bernanke and Treasury

Secretary Henry Paulson, two top officials in charge of US monetary policy, continue to provide obligatory assurance to the nervous public that the United States' economic fundamentals are sound in the face of a jittery market. Days before being delisted from the New York Stock Exchange, shares of the collapsed New Century, a distressed subprime mortgage lender, were recommended by a major Wall Street brokerage firm as a "buy". That firm is now under criminal and regulatory investigation.

On the pages of Asia Times Online over the past two years, I have tried to put forth the rationale for the inevitability of a US housing bubble burst, pointing out reasons that the resultant financial meltdown will be much more widespread and severe than has been generally acknowledged.

On September 14, 2005, I wrote in Greenspan, the Wizard of Bubbleland:

History has shown that the Fed, more often than not, has made wrong decisions based on faulty projection. Greenspan has been rightly criticized for letting a housing price "bubble" develop, equating it to the one that swept technology stocks to stratospheric levels before bursting in 2000. Greenspan argues the Fed's role is to mop up after bubbles burst, since bubbles are hard to spot and deflate safely. But accidents are also difficult to predict, and that difficulty is not a good argument against buying insurance. There is no doubt that there is a price to be paid for every policy action. But the price of prematurely slowing down a debt bubble is infinitely lower than letting the bubble build until it bursts uncontrollably. In finance as in medicine, prevention is preferable to even the best cure. All market participants know pigs lose money. And a monetary pig loses control of the economy.

Alan Greenspan, then Fed chairman, notwithstanding his denial of responsibility in helping through the 1990s to unleash the equity bubble, had this to say in 2004 in hindsight after the bubble burst in 2000: "Instead of trying to contain a putative bubble by drastic actions with largely unpredictable consequences, we chose, as we noted in our mid-1999 congressional testimony, to focus on policies to mitigate the fallout when it occurs and, hopefully, ease the transition to the next expansion."

By "the next expansion", Greenspan meant the next bubble, which manifested itself in housing. The mitigating policy was a massive injection of liquidity into the US banking system.

There is a structural reason that the housing bubble replaced the high-tech bubble. Houses cannot be imported like manufactured goods, although much of the content in houses, such as furniture, hardware, windows, kitchen equipment and bath fixtures, is manufactured overseas. Construction jobs cannot be outsourced overseas to take advantage of wage arbitrage. Instead, some non-skilled jobs are filled by low-wage illegal immigrants.

Total outstanding home mortgages in the US in 1999 were US$4.45 trillion, and by 2004 this amount had grown to $7.56 trillion, most of which was absorbed by refinancing of higher home prices at lower interest rates. When Greenspan took over at the Fed in 1987, total outstanding US home mortgages stood only at $1.82 trillion. On his watch, outstanding home mortgages quadrupled. Much of this money has been printed by the Fed, exported through the trade deficit and reimported as debt.

Thanks E. All things are in the good Lord’s hands ultimately.