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Nightmare on Wall Street
Another emergency rate cut, and investment bank Bear Stearns goes on the auction block. The canary in the coal mine? It's dead.
Andrew Leonard [2008-03-17]

  • This is should not be class warfare

    Make no mistake about it, the Fed has intervened not to the save in the investor class as so many here are want to believe. They have intervened to save the financial system. There are valid arguments about the moral hazard such a deal imposes, and if the bail out is even necessary, but it's not like either investors or employees of Bear are walking away with much. I know from an employee that Bear bonuses over 250k were not to vest for another 5 years and were equity based. Investors are getting pennies on the dollar for their investment.

    The ultimate problem that will not go away is what do you do about risk that can ultimately make any investment worthless. Obviously there are cases of criminal fraud which must be penalized, but it's a slippery slope. Do we return the days of debtor prisons?

    -- AskDong
    [Read AskDong's other letters]
    Monday, March 17, 2008 08:37 AM
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