Bear Stearns Fiasco

George W. Bush hates sick children, but he loves rich bankers. Actions speak louder than words. He has vetoed health insurance for children who need it, not once, but twice. He can’t or won’t find money for helpless children, but he is all too happy to open the government coffers for millionaires and billionaires who screwed things up because of their own greed and incompetence. How does he get away with something like this? JP Morgan Chase is taking over Bear Stearns with help from the federal government. How much more of this insanity do we have to put up with?

If Bear Stearns were to go under who does it hurt? Rich people. Rich people who were so dumb that they invested their money there. Read The Evolution of an Investor if you don’t believe that previous sentence. It is about former stockbroker Blaine Lourd and it contains this gem:

The older brokers in the office all threw around Buffett's name, so Blaine did too. Buffett was useful because everyone knew who he was and everyone thought he had made his money picking stocks. Blaine was picking stocks just like Buffett but using different criteria. The traders in New York would accumulate a block of shares, driving the price up, and then get brokers like Blaine to unload the shares quickly at the higher price—whereupon the price would, often as not, fall. "Seven months in at Lehman, I was one of the top rookie producers," Blaine says, "but every stock I bought went down." His ability to be wrong about the direction of an individual stock was uncanny, even to him. At first, he didn’t understand why his customers didn’t fire him, but soon he came to take their inertia for granted. "It was amazing, the gullibility of the investor," he says. "When you got a new customer, all you needed to do was get three trades out of him. Because one of them is going to work. But you have to get the second one done before the first one goes bad."

It wasn't exactly the career he’d hoped for. Once, he confessed to his boss his misgivings about the performance of his customers' portfolios. His boss told him point-blank, "Blaine, you're confused about your job." A fellow broker added, "Your job is to turn your clients' net worth into your own." Blaine wrote that down in his journal.

I don’t know anyone rich enough who could even consider investing at Bear Stearns. This is from Bear Stearns own web site:

At Bear Stearns, we have been helping high-net-worth individuals and families build and manage their wealth for over fifty years.

Bear Stearns is a company whose former CEO spent time playing golf and bridge rather than working. This same CEO refused to bail out Long-Term Capital Management in 1998.

From JPMorgan close to deal for Bear Stearns at Forbes.com:

The funds' collapse and subsequent problems in the credit markets called into question Bear Stearns ability to manage its own risk and the leadership ability of then-Chief Executive James Cayne. Critics of the company said Cayne spent too much time away from the office last year playing golf and bridge as the problems unfolded.

Cayne is the same executive who refused to let Bear Stearns provide support as part of a Federal Reserve Bank-led plan to rescue Long-Term Capital Management in 1998. His reticence was said to deeply anger some of his fellow Wall Street CEOs, and the episode came up every time Bear was reported to be in trouble in recent months.

Tonight on the Nightly Business Report a video clip of George W. Bush was shown with him saying, “Our financial institutions are strong.” Clueless George, lying George. Does George Bush know the definition of the word "strong." Because Bear Stearns sure ain't it. As long as George W. Bush remains in office I will be mad as hell. The problem is I still have to take it because no one will impeach him. The way things are going he will surely destroy this country of ours before his term is up.

How much more damage do we have to suffer before George W. Bush is thrown out of the White House?