There goes Wall Street
It’s certainly not fair, as this gentleman (in a great interview) shies away from saying.
BSC: $10
ML: $29
Leh: $0 ???
AIG is at the discount window.
Will Goldman and Morgan survive? Are we looking towards a future of all bank-owned brokerages and some boutiques? It certainly looks that way.
Wall Street, especially in recent years, had a very odd business model: borrow for the short term and lend against illiquid assets for the long term. The market can stay irrational longer than you can stay solvent, goes the saying.
Some perspective on the awfulness that our brothers and sisters on Wall Street will soon be feeling:
Relax, everyone has kids with tuition. What makes this situation different than when the Ford or GM guys have to take a buyout and get screwed? Nothing, except GM / Ford guys they don’t have a media sector devoted to them. When the auto industry or textile industry people lose jobs, all us finance people call it “free trade”. This is the “free trade” of capitalism, too, except it hits closer to home.
- Wise comment on Dealbreaker.com
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14. September 2008 at :
Car and Driver
Motor Trend
Automobile
Road & Track
Niche magazines for lowridders, antiques, sport cars, car audio, car mechanics, etc.
Auto industry beat reporters in all the major papers.
And the auto industry doesn’t have a media sector devoted to them? Huh?
14. September 2008 at :
Why can’t big businesses be allowed to fail? There was no reason to rescue Bear Sterns and there is no reason to rescue Lehman or any other financial institution. For many years now this country has been imbued with the idea that the markets could regulate themselves and the results would be great prosperity. Well, there was great prosperity for the people who worked in the markets. Tremendous bonuses, excellent salaries and the general admiration of the society. Now, it turns out that these paragons of economic virtue have been playing a shell game with the markets, the society and themselves. They must be allowed to fail. If success is to have any real meaning there must be the risk of failure. The Government should not be preventing the markets from correcting themselves.
One of our great financial organizations said recently (this means that I have misplaced the source of the quote) that until the prices of housing stabilizes and begins to rise the current economic crisis will not end. Those prices will not stabilize until all of the fat and the bullshit has been purged from the economic system.
None of the private banks is sacrosanct. Let them fail if they must and let those organizations that are better run continue to exist. That is the free market. We have been supporting free market ideals for most of the past thirty years and it is time to live up to our ideals.
14. September 2008 at :
Yeah…that was a silly point. I included his quote just to point out that bankers should be allowed to lose their jobs, too.
14. September 2008 at :
Burn baby…..burn!
15. September 2008 at :
Joel, I agree with you. Free markets should be free. With great upside potential there should be equal downside risk. Otherwise, executives allow hubris to guide their decisions, becuase they think their bad bets will be backstopped by some guarantor of last resort.