On Friday last week the world was rosy. The possibility of a recession seemed to be caged if not tamed. Then on Sunday JP Morgan Chase bought Bear Stearns for one-tenth of the firm’s market price at the close on Friday.
WOW and YIKES. WHAT DOES THAT SAY?
Should we panic ? Should we buckle up ? Should we avoid tall buildings? The answer is NO. But it will be wise to hunker down and cut your spending. This rough ride is going to take awhile.
There is a positive in the volatile market however. There are opportunities out there if you have the money. I will talk about this more tomorrow.
A little cynically do a Google search for the word “Bear Stearns”. And you will be stunned at how quickly the legal piranhas have shown up online to “save” Bear Stearns shareholders.
Generally as a class I do not like lawyers but in this case I admire their sheer audacity. They saw an opportunity and they are going for it. Hardly Mother Teresa but they are sure not rolling over.
Let me be a little sanguine and close with the obvious that the economy is founded on greed- we all know that- it is not an economy for people but corporations. There has to be a revision. If we or the planet is to survive. Till then be careful and ride the storm. Once the storm has passed- and it will pass – there needs to be a deep evaluation of our economy and those we trust.
As one Blogger noted but missed- “greed skews perception”:
“I’ve said it before (e.g.), and I’ll say it again. I simply didn’t, and still don’t, understand how anyone could have thought that giving people, often people with terrible credit histories, mortgages with no money down and often with no documentation of income–and after an unprecedented increase in prices left the market especially vulnerable to a downturn in prices–was a good idea. Maybe if I had studied for an MBA in Harvard and worked my way up to the top of the investment banking industry it would somehow have made sense to me.“
WISHFUL THINKING THEY WERE INSPIRED BY GREED AND SO THEY ACTED AND THE RESULTS ARE DISASTROUS. GREED HAS GOT TO GO-FOR HUMANITY AND THE PLANET.