Letters to the Editor
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"Bargain Basement" Price for Bear, Stearns?
The freaking firm was worthless! Don't you get it?
JP Morgan Chase, with prodding from the Fed, paid a nominal $2 a share; Bear, Stearns stock was $80 a share a month ago.
Even the Sovereign Investment Funds (SIF) mentioned in an earlier post wouldn't get their fingernails dirty with this one.
And, by the way, these SIF are government entities of the oil producing states such as the House of Saud and the House of Putin that are BUYING, not lending, money to Merrill Lynch, Citigroup and the rest---pleasant thought, huh?
The financial-systemic crisis is the most serious one faced by the Western democracies since the Great Depression. Only this time the economies are logarithmically larger and more complex than those of the 1930's. The Fed and other central banks may not have the resources or the knowledge to rectify the mostly unemerged problems buried deep within the financials of Citigroup et al.
Imagine an announcement by Citi on Tuesday: "We regret to inform our depositors that we are compelled to freeze their deposits effective immediately for a 30-day period during which we will attempt to re-organize our financial structure."
What does the average Joan do if she has a deposit in XYZ Bank? She hightails it over there to get it out.
Jimmy Stewart, where are you now that we need you?
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