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RE: Fed doesnt bail out Leman brothers - 9/15/2008 6:02:15 AM

pahunkboy

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pssssssssssst,

Greed is GOOD!

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 6:03:56 AM

kittinSol

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quote:

ORIGINAL: pahunkboy

Greed is GOOD!

I thought greed was GOD?

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 6:10:38 AM

bipolarber

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Well, this morning, there still is no buyer for LB, and the 30 billion hit to the market is now threatening AIG investments, and at least five other major players. Already some of the economic talking heads are talking about a "domino effect"....

If you didn't think the economy was in recession before....

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 6:14:16 AM

MrRodgers

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quote:

ORIGINAL: corysub

quote:

ORIGINAL: Jeffff

According to what I just read, the tax payer will not have to participate in this.

"Treasury Secretary Henry Paulson has said the government will not help close a Lehman deal, and it was clear late Sunday he was not budging."

Money just got tighter.

E.F.Hutton

Paulson is not going to come to the aid of Lehman Brothers. Why would anyone expect the former Chairman of Goldman, Sachs to come to the aid of any key competitor. Merrill Lynch being taken over by BofA, leaves only
Goldman Sachs and Morgan Stanley left in the bulge bracket of investment banks.

The investment banking industry is capitalism at its core...nothing more than paper-trading. It serves no public interest at all and not only do not create jobs but will soon reach 2 million layed off since 1/07. Their highest paid staff pays 35% federal tax on 'income' while the partners (owners) pay 15% on something called 'capital gains', or 'carried interest.' Immorality...prima facie.

With the failure of Merril what we see now is a consolidation necessary to 'save' certain paper but that which will result in greater power to influence Washington (govt.) and go to even higher levels of leverage. This is the life-blood of the capitalist and we will never see and end to the attempt to get govt. to come to the rescue. This is just capitalism...seeking ALL the profits they can make while transfering the risk to the taxpayers. Their is no 'creative destruction' when it comes to the capitalist...only for your company or job.

In every case when they 'takeover' a public company, to break it up and re-sell for more often creating new 'paper' their is debt involved in the purchase and re-sale, leads the effort to do what...REDUCE jobs to help pay the debt service. This often creates a further drag on profits and the value of the 'new' compnay goes down along with employment.

Corporatism and their legions on wall street do NOT benefit society yet call on our collective power of taxes at the federal level to...bail THEM out when they over speculate or over-leverage their speculation. Socialism for the rich and capitalism for the poor.

Capitalism has long since been proven as a economic system...that concentrates rather than distributes wealth.

Oh, BTW, I do NOT believe the secretary. The inside word is that ANY buyer of Lehman will get a minimum FEDERAL guarantee for those securities on the books that end-up non-performing...i.e., junk.

< Message edited by MrRodgers -- 9/15/2008 6:24:26 AM >

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 8:19:54 AM

pahunkboy

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so a bakery produces MORE.

the above simply reshuffles the paper and extracts the money for itself.

so how do we reverse this destruction of public good?

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 8:57:31 AM

Mercnbeth

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~ Fast Reply ~

You can create an encyclopedia with the misinformation being dispensed on the Financial Market threads. Then again, it should be taken with the same reliability as you would take instructions for a do it yourself heart transplant in the 'Health' section.

Best news to come from it, at least for now, the US government is not rewarding failure with $$$.

Best way to prevent this, don't support candidates who have, 'rewarding failure' as a fundamental platform whether personal or corporate.

Worst case, a little knowledge will create a self fulfilling prophecy of global failure of the financial markets. It won't happen because the world, at least for now, still exchanges capital in US dollars. Far beyond any military or 'intelligence' reasons; the integrity of the US financial system prevents another 9/11 type attack. You may hurt, but you don't kill what funds your ability to buy customized pimped out 747.

Best advice - don't look at your 401k until January. None of it is 'insured'. If you have more than $100k in any one bank - move it around so you don't.

All that said - there are plenty of exceptions I could site in my own post. However, if you have a significant part of your net worth in the stock market and you have to ask some of these questions, the lesson to be learned is you shouldn't invest in something you know nothing about. I mean if you can't spell Lehman should you be investing in it or any of their mutual funds? Stick to baseball cards.

On the other hand, if you are 'liquid' now is the time to do some serious bargain hunting. Embarrass yourself and offer pennies on the dollar, and don't be afraid to walk away. It's what is going on at Lehman's with Billions of dollars. BoA was already positioned with Merill and got the balance at 'Dollar Store' pricing. You can do it with 10's and 20's.

Greed is VERY good. Just ask anyone getting entitlements from the Government - they want MORE! It's working for it that creates the problem for most.

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 9:05:46 AM

bipolarber

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Well, okay Merc, but how about we get even a little more fundamental? How about we don't vote for political parties who, (in the words of our "fearless leader") "got drunk" with extending credit to bad risks. It was the Bush plan for an "ownership society" in his first term that deregulated the lending industry which directly led us to this sad state of affairs.

Just to reiterate the obvious: In 2000, when Bush took office, we had the best economy since post WWII... there were budget surpluses out the ass... today, a mere 8 years later, the national debt was doubled. (Even before the Fannie/Freddie takeover) and our lending institutions are starting to have coranaries. This is not ALL Bush's fault. Much of it can be laid at the feet of the republican held house as well... Since all of this was put into motion well before the democratic shift in Congress.

Are you better off now, than you were then?

Can you, or the US, really afford another 4 years of John "I really don't understand the economy" McSame?

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 9:20:28 AM

pahunkboy

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in a nutshell- junk bonds were rated AAA ....these "investments" were fraudulently rated.

A guy walks into bank. robs it goes to prison.

now this happens... to the tune of billions maybe over a trillion, and do you think any one goes to jail????? and Allenwood is a country club...not a real prison....

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 9:55:06 AM

Mercnbeth

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quote:

ORIGINAL: pahunkboy

in a nutshell- junk bonds were rated AAA ....these "investments" were fraudulently rated.

A guy walks into bank. robs it goes to prison.

now this happens... to the tune of billions maybe over a trillion, and do you think any one goes to jail????? and Allenwood is a country club...not a real prison....

If I have the marketing skills to sell my cell phone to a rube for $1 Million should I go to jail when they find out it wasn't worth $100?

For all the 'savvy' investors out there - How many of you have read, cover to cover, the prospectus that comes with their investment information? How many have even bothered to read the details concerning their 401k?

When the 'worst case' that is detailed in those documents happens is the 'savvy investor' entitled to a 'do over' paid for by tax funds?

There is a huge difference between the fraud that was Enron, and the failed investment strategy being sold by Lehman. Everyone wants to disregard the disclaimer appearing in each and every ad; "Income is NOT guaranteed. Deposits are NOT insured". You want to advocate prison for somebody selling something to protect a buyer too stupid to know better than to trust a TV ad? They didn't steal anything. Whether at the casino, race track, or Wall Street; you bet - you lose - you pay. Nobody put a gun to your head.

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 10:03:22 AM

KatyLied

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I hear ya Merc. I also feel this way about people who took out mortgages without understanding what "adjustable rate" can mean to things like: mortgage payments and equity. People must realize that just because a bank will loan you the money and feel you are a justified risk this doesn't mean you have to take it. I was floored when I realized how much the bank was going to approve me for when I went shopping for a construction loan. Floored. There is no way I would ever borrow that much money!

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 10:14:52 AM

popeye1250

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quote:

ORIGINAL: Mercnbeth

~ Fast Reply ~

You can create an encyclopedia with the misinformation being dispensed on the Financial Market threads. Then again, it should be taken with the same reliability as you would take instructions for a do it yourself heart transplant in the 'Health' section.

Best news to come from it, at least for now, the US government is not rewarding failure with $$$.

Best way to prevent this, don't support candidates who have, 'rewarding failure' as a fundamental platform whether personal or corporate.

Worst case, a little knowledge will create a self fulfilling prophecy of global failure of the financial markets. It won't happen because the world, at least for now, still exchanges capital in US dollars. Far beyond any military or 'intelligence' reasons; the integrity of the US financial system prevents another 9/11 type attack. You may hurt, but you don't kill what funds your ability to buy customized pimped out 747.

Best advice - don't look at your 401k until January. None of it is 'insured'. If you have more than $100k in any one bank - move it around so you don't.

All that said - there are plenty of exceptions I could site in my own post. However, if you have a significant part of your net worth in the stock market and you have to ask some of these questions, the lesson to be learned is you shouldn't invest in something you know nothing about. I mean if you can't spell Lehman should you be investing in it or any of their mutual funds? Stick to baseball cards.

On the other hand, if you are 'liquid' now is the time to do some serious bargain hunting. Embarrass yourself and offer pennies on the dollar, and don't be afraid to walk away. It's what is going on at Lehman's with Billions of dollars. BoA was already positioned with Merill and got the balance at 'Dollar Store' pricing. You can do it with 10's and 20's.

Greed is VERY good. Just ask anyone getting entitlements from the Government - they want MORE! It's working for it that creates the problem for most.

Merc, I think you're right.
We may be approaching a "bottom" here in the next few months.
When everyone is "afraid" to buy that's when you want to buy!
When everyone is "afraid" to sell that's when you want to sell.

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 10:21:24 AM

Thadius

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There is a silver lining to this... with money tightened up and folks looking for a place to put their capital, investment in T-bonds is way up today. Oil is also down.... go figure

There are laws protecting 401ks so any investment will be guaranteed to a certain point.

Just my little bit of spin on the topic.

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 10:44:23 AM

IamElise

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This may only interest me, but in reading the history of Lehman Brothers, it seems that the institution was founded in 1858 based in Alabama and gained it's financial resources through the bumper and profilic cotton industry. They didn't have to pay for that cotton to be picked or to be carried to market. Cotton pickers at that point in history kinda had to work for free.

Not much of a believer in Karma, but maybe there's a point to the belief.

On the other hand, my family has never been wealthy. We've worked hard though. I managed to be able to send my first born to college where he graduated last year summa cum laude getting a degree in business thinking that this was his ticket towards the american dream. Very proud of that boy. But...because of Lehman Brothers collapse, he may be laid off with many other young people in the NYC area. He's an excellent employee and works tiredlessly sometimes seven days a week. Still, he's scared. People who work hard shouldn't be afraid of losing their jobs. His main concern? He tells me, "Mom, there are people I work with who have kids who are not going to be able to pay their rent or find anything else soon."

Hard work sometimes just doesn't cut it, but you can at least look at yourself in the mirror. Not sure if the same can be said for the Excecs who placed these workers in such dire straights with sheer excess and greed.

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 10:55:06 AM

pahunkboy

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quote:

ORIGINAL: Thadius

There is a silver lining to this... with money tightened up and folks looking for a place to put their capital, investment in T-bonds is way up today. Oil is also down.... go figure

There are laws protecting 401ks so any investment will be guaranteed to a certain point.

Just my little bit of spin on the topic.

oil by the barrel down. gas to fill the tank -up.

then there is the unusual move of wall street to open trading up over the weekend for 2 hours so lehman could whatever it did..

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 11:10:15 AM

Mercnbeth

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BP,
I'll take the easiest question first...

quote:

Are you better off now, than you were then?

YES! - Unqualified. Not because of what the Government has done to me, (President and/or Congress) but in spite of their best efforts.

quote:

Well, okay Merc, but how about we get even a little more fundamental? How about we don't vote for political parties who, (in the words of our "fearless leader") "got drunk" with extending credit to bad risks. It was the Bush plan for an "ownership society" in his first term that deregulated the lending industry which directly led us to this sad state of affairs.

First you have to start on the foundation of accuracy; the US Government didn't use tax money "extending credit to bad risks", they spent money trying to insulate those making those decisions (Corporate and Personal) who made them. Starting from there the answer is obvious and as I've been saying - LET THEM FAIL!

quote:

Can you, or the US, really afford another 4 years of John "I really don't understand the economy" McSame?

As you know, I will NOT be voting for Senator McCain.

My question to you is, who can stand behind a political party that gives this as a key point of their election platform:

“We will provide immediate relief to working people who have lost their jobs, families who have lost their homes and people who have lost their way.”

Source: http://www.nytimes.com/2008/08/10/opinion/10kinsley.html?_r=1&oref=slogin

(Everyone should read that article)

The fact that this came to my attention as an Op-Ed piece coming from the Democratic Party's press liaison, the NY Times, and even they deemed it irresponsible; speaks to me how dangerous it would be for this country to have to endure an Obama Presidency. The Times tried to 'spin' it to be directed to the people criminally taking jobs and benefits from US citizens by entering and living in this country illegally, but that wasn't stipulated by the platform committee. It detracts from the general representation that the acceptable meaning behind 'Life, Liberty and the Pursuit of Happiness' now is being interpreted as a right of happiness and the insulation of failure; but the concept behind the "lost their way" part should disturb just about everyone.

I mean really; aid to anyone who has "lost their way"?! Is the application for aid; "Do you feel lost?" If so - how much money should the Government provide you to find yourself?" I'm a big time advocate for self awareness; but I can't get behind a program of government grants to facilitate the process. Do you?

This has been to date kept under wraps, but I haven't lived under the support of a 'care-taker' since I was 17, and have no desire to do so at 50.

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 11:52:40 AM

Vendaval

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You guys are quoting Michael Douglas playing Gordon Gecko in Wall Street, circa 1987. Here is another quote from his character -

"Gordon Gekko: The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you."

http://www.imdb.com/title/tt0094291/quotes

quote:

ORIGINAL: kittinSol

quote:

ORIGINAL: pahunkboy

Greed is GOOD!

I thought greed was GOD?

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 1:23:31 PM

pahunkboy

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That was a good movie. Too bad it is a mirror of the world.

To Meck, I disagree.

junk bonds were rated higher then junk, many were rated AAA.

there are maybe 4 ratings firms.

So investors bought JUNK.

This isnt about commanding the best price... it is about a market based on lies - or at the least no documentation to support the income and assets per the mortgage loans.

It amounts to a giant ponzi scheme.

And I do believe the players who fabricated - who lied, ought to be punished. That isnt market forces...it is FRAUD.

I personally AM better off then I was 4/ years ago. But a wrong sneaze and I will be in trouble.. Tho it has always been that way for me.

the theft that has now occured is based on lies.

fake valuation.

no checks and balances...as we now know.

even tho I am better off.... I can accurately and fully state how many houses I own......

burp.

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 1:47:42 PM

Mercnbeth

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quote:

That was a good movie. Too bad it is a mirror of the world.
To Meck, I disagree.
junk bonds were rated higher then junk, many were rated AAA.
there are maybe 4 ratings firms.
So investors bought JUNK.

Hunk,
They bought it with open eyes.

But for a more specific case in point. This morning I sold a house in NJ. Five years ago I got a 'certified appraisal' (rating) of $325k. Six months ago my Realtor, also a licensed and regulated individual, said a 'quick sale' price (rating) was $290k. I sold it for $250k. Should I try and have the appraiser and my Realtor arrested?

It is not about lies, it is about REALITY. I know that we're all being sold on some idealistic 'reality' by politicians, but if you want to be successful you have to make sure your decisions are based upon pragmatic reality. In the case of Lehman, that reality was, you were NOT entitled to income, you were NOT guaranteed you wouldn't loss money.

Does it make you feel better that the CEO of Lehman, Dick Fuld , lost $900 Million in net worth so far? Of course during his tenure he made $466 Million. (Source: http://dailybriefing.blogs.fortune.cnn.com/2008/09/12/dick-fulds-lucrative-round-trip/ )

So I don't think he'll be in the line for the Democratic Party's platform plank to give money to those who "lost their way".

EDITED TO ADD:

Staying on the Gordon Gekko theme; "It's a 'zero sum' game, kid". That means that today, there is $900 Million of Mr. Fuld's money out there ready to be plucked! I'm working hard going after my share, how about you?

< Message edited by Mercnbeth -- 9/15/2008 1:55:58 PM >

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RE: Fed doesnt bail out Leman brothers - 9/15/2008 1:57:11 PM

kittinSol

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Except that now, contrary to the Eighties, greed is no longer extolled as a virtue - and the fall of greed is happening all around us today. Shame those of us who tried not to participate in its crumbling empire are going to have to bear the cost anyway

.

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RE: Fed doesnt bail out Leman brothers - 9/16/2008 12:54:32 AM

TheUtopian

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quote:

ORIGINAL: Thadius

There is a silver lining to this... with money tightened up and folks looking for a place to put their capital, investment in T-bonds is way up today. Oil is also down.... go figure

There are laws protecting 401ks so any investment will be guaranteed to a certain point.

Just my little bit of spin on the topic.

I'd stick with the baseball cards, homie.....Even with the inflationary aspect of petroleum products factored out of the equation, the potential T-bond yields you speak to don't even cover the current rate of inflation.

And even when we swing into a full-on deflationary cycle, no one can count on whatever new administration that comes in to mimic Volker during the Carter years.

- R

< Message edited by TheUtopian -- 9/16/2008 1:00:39 AM >

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