AJ, Washington DC

The Worst Trade Of All Time

Thats 10 percent of Bear Stearns. Lewis bought in at a heavy discount back then, paying and average $100 per share. BS had been trading as high as $160 or so, and he thought he was getting a bargain. He's known to make risky bets as a currency trader, and I would be surprised if he had not hedged his investment - still, I cant say that he is an astute investor - BS was $30 last Friday, and I'm surprised he had not dumped the shares before then. Perhaps he thought that unwinding a 10 percent position would drive the stock down further. Do very large investors not have a Stop Loss built in at 5% or 10%??? I commiserate with his losses, but it's hard to be sympathetic. Lewis is a speculator, and knows the risks.

The Coming Crash of 2008: A Result of Overleveraging

You're right about the derivatives dwarfing the 'real' markets and we all know the Hedge Funds, Commercial and Investment banks are highly leveraged to the point that an 'investor run' can bring them down like a house of cards.

That said, are you just going to make the movie about the Crash of 2008, or are you going to suggest any way to get out from under the Derivative Mountain? If the markets do crash, you wont have the funds to make and distribute your documentary film, and I certainly wont be able to afford to pay to see it :)

What the Fed is doing is shoring up th supports, but unless there is concerted action from other Central banks, notably ECB, China, and Japan and UK, there wont be any significant progress. In fact, once the dominoes start falling, people will see that the European economies are just as fragile and leveraged. Italy and UK's cracks are already showing, Germany and France are next.

What really worries me is the high proportion of LEVEL 3 assets the banks are holding. They have no idea what these securities are worth, and I have a feeling we are about to find out the hard way.