| Re: Bailout puts the class war back in business with a vengeance; gamblers take advantage of speculating investment banks merged with commercial savings and deposits banks & the consequences of the defeat of the Glass-Steagall act. |
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Group: alt.philosophy · Group Profile
Author: Fred WeissFred Weiss Date: Sep 17, 2008 18:16
On Sep 17, 4:52Â pm, Immortalist yahoo.com> wrote:> MICHAEL HUDSON: ...
>....And the question that Wall Street has,
> if you’re going to take a gamble on bad debts that can’t be paid, how
> are you going to come out a winner? And there’s only one way of coming
> out a winner, and that’s to make the government bail you out.
Umm...how have they come out a winner?
IndyMac stockholders were wiped out. Lehman Bros. stockholders were
wiped out. Fannie and Freddie stockholders were wiped out. BearStearns
and Countrywide stockholders got a pittance, the equivalent of 10cents
on a dollar. Roughly the same will likely now happen to Washington
Mutual and Wachovia in the coming days. The best parts of MerrillLynch
will be salvaged, but it will now be absorbed into Bank of America.
At least one venerable money market fund just did the unthinkable and
was forced to "break the buck" (primarily, as I understand it because
of investments in Lehman Bros securities). They put a 7-day halt on
depositors getting access to their funds but that's very likely just
staving off the inevitable run for the exists as soon as trading
resumes. It will be very difficult for this firm to survive.
So tell me how they came out winners.
Fred Weiss
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