Hope this morning rocks your world.
You crazy kids, always wanting to privatize profits, but then make public all the risk. Like today, AIG is sniffing around for some help, just as Lehmen Brothers did. And god bless the US government for not bailing them out.
Sometimes you have to fail to learn a lesson. Kind of like how conservatives weren't interested in helping people who signed up for adjustable mortgages, right? "Those dumb people need to learn a lesson," was the sentiment, I believe. Ah, yes. That works... rich investors make money, and then when things start to break, the risk is transferred to the public via bailouts.
Did you know that in Lehman has been around for over 158 years and had never reported a quarterly loss until this June? Shocker.
From Asia Times:
"An enormous hoax has been perpetrated on global financial markets during the past 10 years. An American economy based on opening containers from China and selling the contents at Wal-Mart, or trading houses back and forth, provides scant profitability. Where the underlying profitability of the American economy was poor, financial engineering managed to transform thin profits into apparently fat ones through the magic of leverage.
The income of American consumers might have stagnated, but the price of their houses doubled during 1998-2007 thanks to the application of leverage to mortgage finance. The profitability of American corporations might have slowed, but the application of leverage in the form of mergers and acquisitions financed with junk bonds multiplied the thin band of profitability.
Wall Street and the City of London rode an unprecedented wave of profitability by providing overpriced leverage to consumer and corporate markets. Led by the financial engineers at Lehman, the securities industry grew an enormous infrastructure of staff, systems, and financial exposure. They were so successful that when the music stopped, there was no way to liquidate this mechanism gracefully. It only could be allowed to collapse."
Oh, and HERE'S another treasure:
Other hedge fund managers recognize the dangers and the harm that is befalling bank employees who have been paid in their companies’ stocks . “My children, their playmates’ fathers work at Lehman,” said one manager who is short Lehman and asked to remain anonymous, citing the sensitivity of the situation. “Obviously I had nothing to do with what happened, and the idea that I profited, and they got clobbered, and I’ve got to see them on Monday is awkward. I feel badly for them.”