thku4grace

Rant Anniversary - Cramer's Mad Money (8/1/08)

Any regular watchers of CNBC havel seen this Cramer implosion at least a dozen times. I think an important fact about this video is part of what Cramer revealed. He was upset with the Fed to be sure, but it was due to the loss of jobs by many of his friends who had been working in the industry for 25 years. One should ask who his friends are who are losing their jobs? Cramer's 'friends' were working for hedge funds, and investment banks that didn't due their own due diligence before entering into what had been a very lucrative market, but one that had yet been unchallenged by the eventual defaults that would occur as these adjustable sub-prime loans adjusted upwards. Cramer's friends richly deserved to lose their jobs. They were irresponsible with other people's money. They didn't do the required due diligence and instead banked on the lucrative fees they made in the short term so as to fully capitalize on their bonuses year end. These guys should be working at McDonalds with the business acumen they show. So Cramer's anger is very, very misdirected. It should be directed at the sheer stupidity and greed his good friends had. But then this just goes to show you what a pompous, out of touch, greedy jerk he is.

Warren Buffett Is Wrong on Fed Intervention in Bear Stearns

I agree that the bailout is economically unethical. Seeing stupid, reckless firms like Bear Stearns take the full blow would provide a strong incentive for other firms from using similar tactics in the future and reap benefits for the industry in the long term. Additionally, it would also apply some pain onto the economy which would be directed back at the Fed rightfully so, for not supervising the industry. Unfortunately, it had more to do with Greenspan's Fed. I believe the Fed and the additional pressure from Congress to act will lead to additional oversight and/or rule changes which the industry won't like but are richly deserved. I think the pain of mega-billion dollar losses experienced by these investment banks together with the expectant new oversight and future rule changes imposed are all we can expect and or desire in a free market economy. The prospect of actually allowing Bear Stearns to go BK may have a much stronger effect than desired for the entire industry and the whole economy. It would probably be overkill just to force change. Change that can be had for a lesser cost.