The Enabler In Chief
From Flecks latest... Last week, (the Bear Stearns collapse) was deemed (by the market)
to be bullish because financial crises always mean you should buy stocks.
Bear Stearns, teetering on the edge of bankruptcy, was in effect able to tell the Fed:
"You can't hurt us anymore, but we can hurt you if the deal collapses, so we demand more money."
(Which Bear got a week ago, when JPMorgan Chaseraised its takeover bid.)
Meanwhile, the bondholders (lenders) were made whole -- as the Fed, through its assumption of debt, coughed up roughly $250 per BSC share.
All of this proves the old saw that fact is stranger than fiction. Or, said differently, you can't make this stuff up.
Sadly, as my friend Jim Grant put it to me recently, the speculators have gained control at the expense of the savers.
It's a variation of what I said last week: that the prudent are bailing out the reckless.
The Fed seems under the impression that its role is to act as enabler-in-chief.
to be bullish because financial crises always mean you should buy stocks.
Bear Stearns, teetering on the edge of bankruptcy, was in effect able to tell the Fed:
"You can't hurt us anymore, but we can hurt you if the deal collapses, so we demand more money."
(Which Bear got a week ago, when JPMorgan Chaseraised its takeover bid.)
Meanwhile, the bondholders (lenders) were made whole -- as the Fed, through its assumption of debt, coughed up roughly $250 per BSC share.
All of this proves the old saw that fact is stranger than fiction. Or, said differently, you can't make this stuff up.
Sadly, as my friend Jim Grant put it to me recently, the speculators have gained control at the expense of the savers.
It's a variation of what I said last week: that the prudent are bailing out the reckless.
The Fed seems under the impression that its role is to act as enabler-in-chief.
Comments