Posted on 10/17/2009 6:09:52 AM PDT by Wolfie
Edited on 10/17/2009 8:54:23 AM PDT by Admin Moderator. [history]
On Tuesday, March 11th, 2008, somebody — nobody knows who — made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness — "like buying 1.7 million lottery tickets," according to one financial analyst.
There was no avoiding the losses once house prices rose beyond sustainable levels. Period. $20 trillion markets can't fly up by double and then half, without burning lots and lots of people. The only way to prevent smashes is to prevent immoderate booms. And frankly you can't; at best you can moderate them a little.
There’s no question (to me) that the credit markets are minimally 3x smarter than the equity market. No question at all.
Personally, I don’t believe BSC got anything different than what it deserved. It was levered far beyond any reasonable extent. But it was not levered that much more than any of its’ compadres, and had the misfortune of being the first sacrifice. Bear just had the misfortune of having its’ lines wired with “off” switches in the circuit and probably believed that it was TBTF along with Goldman and JPM, and at that point even LEH.
As for the poster's reaction to this article, I'll let you be a judge. The cursory glance at it reveals immediately, however, that, regardless of the content of individual paragraphs, they are completely disconnected from each other (in terms of logic). It's a rant where the author lists all the grievances he has about anything related (as he perceives it) to Wall Street. The other striking feature, of course, is that he repeats leftist cliche.
I'll let you be a judge, but the foregoing should, but apparently does not, raise question about the writer's credibility.
Many on this forum, however, are not sufficiently critical, apparently because the anti-Wall Street sentiments reverberate with them.
No, some of the words are used correctly. It was hard for me to find a thought, however, that would start with a factually correct premise and arrive at a conclusion in a logical manner. I don't remember a single instance of that, sorry.
"Namecalling is the last refuge of the truly clueless megalomaniacs."
I completely agree with you, as stated. You seem to be implying more than that: the one who does so must be a megalomaniac. That part is false.
One may also state conclusions (name-calling) after stating the reasons dozens and dozens of times elsewhere, for instance.
Thank you for your honesty. It's indeed a tactic pursued by many in the past --- aligning themeselves with fascists and communists (who cares if they are a little left?) as long as that is tactically expedient.
I have aversion to this position on moral grounds. Sorry.
Please see post 38.
Sorry, clarify your position?
You seem to be attacking the author instead of the fascism displayed by our Gov’t.
Is not the cabal of Gov’t bailing out Wall Street, bad?
It is anathema to liberty.
"You seem to be attacking the author instead of the fascism displayed by our Gov’t."
I have a problem with "instead" in this sentence. Both are wrong and for different reasons. As for bailouts, I see two problems: (i) they should not have occurred and (ii) if they did occur, they should've at least been implemented consistently. Our government (Bush administration) violated both (all but Lehman were bailed out, which almost single-handedly precipitated the credit freeze. This is because the markets had assumed, at least after the bailout of S&L industry in the 1980s, that we now subscribe to the too-big-to-fail policy. When Lehman went down, the markets concluded that the gov't abandoned that policy. In lieu of what? That was unclear, and lending froze in response to that uncertainly.]
As I have tried to substantiate on another thread by walking through another of the author's articles (cf. post 38), the authors is a charlatan that does not understand the words he is using and merely tries to entice class envy. I consider that both intellectually and morally wrong.
And this is the source of my disagreement with many other posters: unlike they, I don't take sides. Since Taibi criticizes the government, they take his side. But it is insufficient to attack: one has to attack from moral position and by intellectually defensible means. The author has neither.
More generally, and this is the aspect that dismays me, many self-professed conservatives have joined the leftist witch hunt against Wall Street, no matter how little of it they understand.
Since you mentioned fascism, a historical analogy may help to clarify my converns. German Communists vigorously attacked Nazis in 1929 and thereafter. Would you join them because you too are against fascism? Of course not: communists were attacking Nazis NOT from a moral position and by intellectually flawed means. Common sense and centrist political position has disappeared in Germany: one leftist scum (communists) was fighting another leftist scum (fascists). That is largely what made fascist victory possible.
Unfortunately, there is a parallel here with our situation. Many conservatives have joined lefties in a witch hunt against Wall Street, CEOs and whatever other symbols of capitalism, all the while paying lip service to the abstract idea of free markets or some such thing. In doing so, they don't even recognize, most of the time, that they simply repeat what they read in the MSM without enough knowledge to judge whether that is fact of fiction.
To be sure, these people are conservative in all other areas. But when it comes to economics, they take as leftist positions as the leftists do. As a result, very few people represent, as in Germany, the fact-based and reasoned view of our financial institutions and economic fondations of our society. That largely explains why we have a socialist in the White House: when Bush admin behaves like socialists (growing the gov't by 56%, bailouts, open borders, etc.), why would Communists NOT come to power; who would oppose them? It's not Obama, therefore, that is a problem. It is the people who voted for him, and the lack of principled and informed opposition on the part of conservatives who sing the same leftist songs and engage in the same witch hunts --- against CEOs, Wall Street, outsourcing...
bump
You are EXACTLY right. Thank you also for correctly recognizing (few people appear to do so) the methods used by our government as those used by Italian fascists and subsequently German Nazis in controlling their respective economies.
But, I would not attack unions for being against illegal aliens working in our economy nor for the ACLU supporting Rush in his privacy in Florida.
Sometimes, there is an axis, and if the guy is left, and if that joins a conservative in economics, then so be it. Even if the end game is different for each view.
Was Taibbi right? I suspect he's more right than the insider posters on this thread are willing to admit, but heck, how do I know, I'm just a computer programmer, albeit one who has spent the better part of his free time the past year trying to understand what happened in 2008.
Whether it happened the way Taibbi says it did or not, of one thing I'm sure. Last year was one massive; government, central bank, wall street tag team clusterf*Ck of the American people.
Not that we weren't bent over and spread wide asking for it.
What fools we were! Look at the politicians we elected (and continue to elect) who brought us the CRA, Freddie and Fannie, and moral hazard out the yin yang. And look at us, trusting a group of central planners at the Federal Reserve to get the price of money right when they haven't done so in 96 years. And freaking look at us, so easily convinced that houses, which are after all CONSUMABLES, albeit long lasting ones, will always RISE in price, along with stocks!
Anybody who wants to argue that we got what we deserved gets no argument from me.
But now it's time to get a clue, people.
Take anything a wall street insider (including those posting on this thread regardless of the fact they're FReepers) has to say with a grain of salt. And for goodness sakes, don't believe ANYTHING the government says, regardless of whether it's being run by D's or R's. Oh... and END THE FREAKING FED! Central planning doesn't work. Never has. Never will.
I completely agree with you in this example. But please note a difference. Your general disagreement with unions is not, I presume, on moral grounds but merely political. They pursue their own interests and (at least nowadays) go too far, often ruining the goose that lays the golden eggs. Conservatives oppose that for the sake of balance and fairness. No deep moral principles, as far as I can see, are involved here. ACLU is more problematic, of course, but can still be accepted as an ally if in a particular instance, they act from an acceptable position and proceed in an acceptable manner.
None of the above applies to Taibi (his writing is pure unsubstantiated vitriol, aimed at enticing class envy). Finally, you CAN carefully examine the unions' or ACLU's position and then agree with them in a particular instance. In contrast, most people take Taibis sides without sufficient knowledge of facts and finance in general, and level unsubstantiated accusations against myriads of people. I have a problem with that.
FRegards, and enjoy the weekend.
Thank you, and the same to you. I look forward so “seeing” you on other threads.
There it is again!
"You lesser mortals don't have the intelligence or the ability to grasp the complexities of Wall Street."
How freaking convenient!
I don't have to be an expert in Diptheria to know I want to avoid it or kill it. Let's get real.
The facts induce the hatred of criminals. Left or Right is irrelevant. The financial criminals can have (R) or (D) behind their names, same as those of us who criticize and ask the tough questions.
For a smart man with the fancy word and phrases, did you notice that you did not respond to a single verifiable fact in the article?
Not one!
Was there 12 to 1 leveraging?
Were there more proxy votes than shares outstanding?
Simple questions that anyone can grasp.
I noticed.
To the chump investor, whose connection to the fraud is ten times removed, you are criminals pure and simple and you can expect that if an alternative to Wall Street emerges, hundreds of thousands of retirement accounts will disappear from your clutches; certainly mine.
Do it three times shame on you.
Do it 10 times, shame on me!
OK, I'll bite.
Why?
“OK, I’ll bite. Why?”
Because he doesn’t want anyone to know that Soros and the Red Chinese drained the money market accounts to crash the financial sector so the Kenyan could get elected.
America was robbed of trillions in equity to get the Kenyan elected.
“OK, I’ll bite. Why?”
Because he doesn’t want anyone to know that Soros and the Red Chinese drained the money market accounts to crash the financial sector so the Kenyan could get elected.
America was robbed of trillions in equity to get the Kenyan elected.
This is (I believe) about the third in-depth report about this subject that Matt Taiibi has written. They’ve all been informative and well-researched, irrespective of this politics.
I think one of them was my first post ever at FReepers and a lot of people wondered why a newbie’s first post was from Rolling Stone.
LOL
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.