Posted on 03/30/2008 9:16:48 PM PDT by bruinbirdman
Absolut Socialism.
Damn, that’s good!
If this advocated to be in the USA, it will NEVER happen.
"Two of the country's top four banks - Christiania Bank and Fokus - were seized by force majeure. "
If those "purged" senior management were transfered with benefits to new positions...a deal could be made!
On its surface, this doesn't sound entirely unreasonable. If the entity is worthless and has no way to ever make good on its obligations without a bailout, why should the stock be worth anything?
When you invest in equities, 100% of your capital is at risk. That is the nature of the game.
Shareholders like voters need to start throwing the bums (elites) out aka feckless politicians and management. Lesser of the evils as long as it doesn't effect me thinking is suicide.
Just because an entity is illiquid does not mean it is insolvent. Bear Sterns may have been worth more than $10 per share in an orderly liquidation by the bankruptcy court. Most of those mortgage securities for which there is currently no market are not worthless. Since the government thought it important to avoid the disrupting effect of a bankruptcy proceeding, it would not have been reasonable to expect Bear shareholders to pay the full price of that policy decision. Where true fairness lies is a thoroughly murky subject, not clear cut as this article implies.
I remember when Republicans used to stand for small government solutions.
Doesn't sound too different from the actions taken in the aftermath of the last US real estate bust in the late 1980's/early 1990's when the Resolution Trust Corporation took over control of insolvent American banks.
No one has claimed that the original, pre-crisis value of that basket was $30 billion.
It is entirely possible that the Bear mortgage securities will be worth more than $30 billion in a calmer market, in which case the Fed will actually make a profit on this alleged bailout.
The Fed should have loaned Bear Stearns the money - 0% for the first 12 months, then 6.99% - and if they're a day late, 39%.
Am having a kind of ‘de ja vu’ but it is only the ‘Truman Story’ - and those ‘master manipulations’ I am thinking of. Nonetheless, this all has a strange quality about it. . .
Evans-Pritchard has been edging out to the loony fringe for a while, but this takes the cake.
Maybe under Obama or Clinton. But unimaginable otherwise.
yitbos
“I remember when Republicans used to stand for small government solutions.”
That was a loooooong time ago.
We are soooooo dead!
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/v5SLFncnzYHc.asf
I very much enjoyed this Bloomberg interview with Jim Grant, publisher of Grant’s Interest Rate Observer, who is pretty widely regarded as a most astute observer/commentator on interest rate policy. And, I agree with virtually all he’s saying. For those who care about such things.
And for those who care about such things, I highly recommend listening to Don Coxe’s weekly conf. call here:
http://events.startcast.com/events/199/B0003/#
What has always frightened me so much about Bush is how he turns every crisis into a government power grab. It always takes me back to “1984” and “Brave new world”. Americans keep giving up there freedom in the name of Government is going to fix everything. When in fact Government is destroying everything that America was founded on. Even this current crisis was caused by relaxing rules and regulations for the sake of wall street and bankers. It gave them the chance to create this whole mess. Is the federal government now proposing to ban these types of ponzi get rich quick schemes- No they are not. They just want more power to watch over it. They never used the power they already had. The financial “Geniuses” made all the money from it. They get to laugh as the American tax payer gets to try and bail them out. How far we have fallen.
It...it seems SO LONG ago....sniff.
prisoner6
I echo your sentiments.
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