drunkle- Never said anything about not shorting stocks for personal gain – the stock market exists to make money…..Just saying, people might want to take pause before adding fuel to the fire hoping that more banking stocks tank, or better yet completely fail- making you a crapload in your short…IF you’re also willing to see a mass run on banks, or your bank fail and wonder what happened to all your hard earned $$ or when you’ll get them back. Everyone looks to take advantage of someone else’s peril- last week every major wall st bank was looking at stealing deals from bear, furthering their deterioration.
The Fed didn’t bail out Bear’s shareholders – it bailed out its creditors, customers, trading partners, etc…would it have been smart to let Bear default on its 13+ Trillion notional derivative contracts ( in their last 10K filing), or let its 30B+ assets under management in their BSAM business, go to SIPC/FDIC insurance? Now it makes the 30B look cheap doesn’t it?
The Fed bailed out 1 bank because it could not afford not to. I think you fail to understand the interdependency of all these banks – it does not behoove any of them to watch their competition fail as their competition is also the counterparty on trades, contracts. The failure of any 1 major bank leads to much broader consquequences including hurting the little guy – that would be you and me. Do you know what a mass liquidiation would have done to the market and its trickle down effects on valuations? You think it hits you in the tax dollars now, just wait if big banks are allowed to fail.
