A Modest Proposal

If you can balance your checkbook, you know more about Ordinary Finances than I do. If you have a viable Retirement Plan, I’m impressed; if you understand the details of the plan, I’m overwhelmed.

All of which to say, I haven’t the faintest idea what is going on in the World of High Finance. Markets are trembling in panic, bankers and treasury secretaries and financiers are huddling in secret.

Even Tex Lameduck has taken notice, and reports that his administration “is on top of the problem.” You may find Balm for the Soul in that news.

What I have been able to figure out is that Bear Stearns, which is (or was) a Pretty Big Deal in Financial Markets and not a running back in the NFL, developed what Experts call a Cash Flow Problem on a Global Scale.

This CFP/GS syndrome is not only Toxic, but also Contagious. To prevent it from spreading to other Pretty Big Deals — and thence to Monumentally Big Deals on a Cosmic Scale — the US government and the Charitable Wing of JPMorgan Bank have bailed Bear Stearns out of its troubles.

On the surface, that would seem like a Really Nice Thing to do. It was accomplished by having JPM buy BS (I just love their monogram) for something in the area of 325 million dollars. That’s a Whole Shipload of Money more than I can wrap my head around.

Still, one feature of the deal baffles me. By Latest Accounts, the BS headquarters building itself is worth about five times the Bail-Out Price. And the BS Assettery (the secret room where they keep mortgages and such-like items) is Stuffed To The Gunnels with papers reported to be worth maybe eighty or ninety times that much.

Which means that JPM bought out BS at a penny on the dollar. As much as the BS people must be Rapturously Overjoyed by the deal, the Wise Old Men at JPM may also be cheered by this Stearn of events. Perhaps JPM was in dire straits its own self, and glad to be invited to this old-fashioned Penny Sale.

What I’m getting at is this. I was sort of hoping maybe Mr. Bernanke at the Fed, or Mr. Paulsen at the Treasury, could do Something Along Those Lines on my behalf. With just a one-time wink and nudge, my next social security check would pay off the Mortgage and leave enough for a Pretty Nice New Car.

Is that Too Much To Ask?


2 thoughts on “A Modest Proposal

  1. Anytime President “Heckuva job, Brownie” Bush says his administration “is on top of the problem, you’d better be scared. You had better be very scared.

    As for the Fed or any other federal agency helping you, as an individual citizen and taxpayer, all such help would only serve to make you indolent and dependent on the welfare state. We can’t have that, now can we?

    With Bear Stearns, it’s different. For one thing, you almost certainly have the following kind of thing going for you, which makes all the difference.

    Wall Street hopes to pave road to Bush victory
    By David Weidner
    Luisa Beltran
    Last Updated: 6/21/2004 12:02:58 AM

    Tit for Tat

    Wall Street has come out big for Bush. Currently, several chief executives – including Stan O’Neal of Merrill Lynch Philip Purcell of Morgan Stanley John Mack of CSFB (CSR), Joseph Grano of UBS, Henry Paulson of Goldman Sachs (GS), and James Cayne of Bear Stearns (BSC) — are “Rangers,” having raised $200,000 or more for the Bush-Cheney campaign.

    Or this . . .

    James Cayne , 74 (bio), Bear Stearns chairman 2001-present; world-class Bridge player

    $65,150* Republican
    $25,152 Democrat
    $64,468 special interest
    total: $154,770

    posted 03/02/08
    Cayne, James E. Mr.
    New York , NY 10179, REPUBLICAN NATIONAL COMMITTEE (R), $2,500, primary, 01/15/08

    And that’s just the CEO. On top of his contributions you have one or more PACs and the giving of BS-affiliated brokers all over the country, extremely weighted toward the Bush-Cheney ’04 campaign, the Republican Party and other Republicans’ campaigns.

    In the conservative Republican scheme of things, you have to be wealthy and well-connected to really matter. Plus, of course, generous with your campaign contributions.

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