Letters to the Editor
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A crash is a 7% drop in a few days.
We're down 7-12% depending on the index you look at, YTD. So it's a slow unwinding. Technical analysts will point to the volatility such as yesterday's 400 pt jump as a stuttering before it all falls off the cliff. But the technicians aren't always right on this point.
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The Unanswered Question
I did not see in the text any explanation of why he allowed the price to move from $2 to $10 for Bear Stearns.
Was he asked that question later?
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Non-Bear Stearns Issue
The Chairman says, "Normally, the market sorts out which companies survive and which fail, and that is as it should be."
Of course, this is nonsense. We see example after example of government structures, laws, and institutions being used to "help" companies survive. Take United Airlines...please. Chapter 11 allowed them to stiff shareholders, offload their pensions, and emerge a financially secure (if no better operationally) than before.
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same as it ever was
Deregulation when that makes money for Wall Street, and life preservers when self-regulation doesn't work. Which it never does.
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Plus ça change, plus c'est la même chose
"If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem." - J. Paul Getty
Scale that up just one step, and you can almost see the Bear-Stearns managerial logic: "If we take on enough risk, the government won't be able to let us fail."
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Absolutely BS
The rich bail out the rich ....... their relationships are symbiotic and they scratch each other's back ... besides playing golf together, going to the same parties and exchanging inside investor info .....
Bernanke's statement was typically economics gibberish ....... economics has no experts ..... it is not science and it quotes almost totally from within its own discipline
If 100,000 people were in danger of being evicted from their housing but they were working class people, the fed would have let it happen ......
But then they know the american people are all in a trance ....