dougnhi

Lehman: Victim of F&F Bailouts Plus the Bystander Effect

Why would anybody want this company? Only because if they don't, the level 3 assets on their books will have to be sold, at which point the mark-to-market value of all this toxic waste will be discovered. That, and the insurance swaps, will ripple. The Fed has opened pandora's box with each successively larger public taxpayer funded bailout, and now moral hazard has gone terribly wrong. The best thing for everyone is the least intuititve.....let them fail! Until we reassert that stupid decisions will incurr real losses, we can't have a healthy and fair market. Let's hope cooler heads prevail, and that taxpayer money won't be used any more. We have PLENTY of public debt already...we don't need Paulson and Bernanke backing up the truck anymore.

Jump in Merrill’s Level III Assets Points to Continued Risk

These companies are insolvent. Everyone knows this, and Bernanke isn't really fooling anyone by all the games and tricks to allow hiding this information. In any other corporate setting, this would be criminal and people would go to jail. Funny, when you're a banker with friends in high places, the rules that apply to everyone else don't apply to you. The last laugh will be on those who have been buying into this sucker rally in financials....Wave 3 is just around the corner. My hope is that the speculators will get the lesson they desperately need so that moral hazard can be put back in the bottle and we can get back to something resembling a "fair" market; not one that's dominated by manipulation and outright fraud. If Bernanke thinks he's a "depression" genius, I retort that look at how the world now views Greenspan (contempt). Bernanke will fare even worse after this whole alphabet soup mess he's created to monetize the bad bank debts and debauch the dollar. Is he kidding? Oil's at $122, and all commodities smell INFLATION! This guy's got to go.

Short Covering Helps Boost Stocks

This kind of manipulation will come back to haunt in so many subtle ways. For all the folks that think that this was such a clever move by the fed, to swap nearly worthless paper for treasuries, I'm sure you'll regret the day eventually. Moral hazard aside, nobody's balance sheet has been exposed, no bad debts erased, no leverage unwound. It's still a mess, and the only thing that happened today is that Helicopter Ben gave bankers money that they'll turn around and pour into the stock market and commodities. This might temporarily help the market, but it doesn't help housing, interest rates, consumer spending, or prevent Moral Hazard. A sad day regardless of the 400pt swing. People think such short term thoughts...it's no wonder why we're in such a mess. Wake up folks...the fed isn't helping...the fed IS the problem. The games need to stop, the market should correct, and then we'll find out who's solvent and who's not. Until then, it's just a cheap trick.