Nate C

'Fedization': Bear's Rescue Presents a Major Moral Hazard

The Feddoes not give a damn about "moral hazards." The Fed is owned and operated for the benefit of the banks. The Fed is just doing their job--bailing out their owners who are got into trouble with MBS. The Fed is an illegal institution that can do anything it wants with almost no oversight by Congress. Most of the simpletons in Congress do not even know what a MBS is. They only know the buzz words like "liquidity" and "bring stability."

The Federal Reserve needs to be closed. They recklessly debase our currency and reduce our purchasing power by lowering interest rates to rescue the wall street banks. And guess who gets to pay for all of this: the US taxpayer as usual.

3 Reasons To Be Bullish on the Investment Banks

David--keep drinking that kool-Aid. The investment banks are insolvent thanks to their highly leveraged business models. Why is GS, LEH, and MS going to the fed to get money? Do you actually believe their bogus reasons such as "we are testing the new Fed facility" which GS claimed or do you believe LEH's excuse that they were "demonstrating strength and leadership." The banks are facing collapse. No one in the world is willing to enter into repo agreements with the investment banks because word is out that the investment banks are going insolvent. The only way they can postpone their collapse, is to borrow directly from the Federal Reserve.

Just because the shares of LEH, MS, and GS all went up last week does not mean all is well. Remember two weeks ago when the Fed announced their latest attempt to bring $200 billion in liquidity (it happened on a Tuesday). By Thursday night Bear Stearns was calling the Fed and the SEC, telling them that they were going to be forced to file for bankruptcy Friday morning.

Do not invest in the Investment banks. Last week's rally was short covering and idiot institutions who believe that the Fed will save the financial markets yet again. Dont be a sheep and follow their lead.