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September 14, 2008 at 9:51 PM in reply to: Lehman Said to Prepare Bankruptcy as Buyers Withdraw (BofA to pick up Merril Lynch) #270550September 14, 2008 at 9:51 PM in reply to: Lehman Said to Prepare Bankruptcy as Buyers Withdraw (BofA to pick up Merril Lynch) #270554
davelj
Participant[quote=TheBreeze]Why is BofA paying a premium for MER? And why such a massive premium? MER was trading for $17 on Friday and BofA is going to pay $29.
That’s ridiculous. The gubmint must be involved somehow.[/quote]
In this whole bizarre mess, the price BofA is paying for Merrill is the most bizarre. Normally I can come up with some oddball potential explanation. But this one? Can’t do it. I’m mystified.
But I’m assuming it has some tie into saving BofA’s ass in the end. For example, if allowing Merrill to fail after Lehman failed then caused BofA to go down the tubes as a result (due to a lack of confidence in the system) then MAYBE BofA figured: “We’re the only party that can buy these clowns and we have to make it look like all of the clowns are worth something. Because if the clowns aren’t worth anything, then we’re not worth anything (even though we’re a money center bank – a higher caliber of clown than the investment banks). The illusion must be maintained that clowns are valuable. Therefore, we will use our stock (re: funny money) as a currency and buy Merrill at a premium to keep the illusion of value in tact… hopefully long enough to get us all out of the woods.”
That’s the best I can do. Totally weird.
September 14, 2008 at 9:51 PM in reply to: Lehman Said to Prepare Bankruptcy as Buyers Withdraw (BofA to pick up Merril Lynch) #270602Participant[quote=TheBreeze]Why is BofA paying a premium for MER? And why such a massive premium? MER was trading for $17 on Friday and BofA is going to pay $29.
That’s ridiculous. The gubmint must be involved somehow.[/quote]
In this whole bizarre mess, the price BofA is paying for Merrill is the most bizarre. Normally I can come up with some oddball potential explanation. But this one? Can’t do it. I’m mystified.
But I’m assuming it has some tie into saving BofA’s ass in the end. For example, if allowing Merrill to fail after Lehman failed then caused BofA to go down the tubes as a result (due to a lack of confidence in the system) then MAYBE BofA figured: “We’re the only party that can buy these clowns and we have to make it look like all of the clowns are worth something. Because if the clowns aren’t worth anything, then we’re not worth anything (even though we’re a money center bank – a higher caliber of clown than the investment banks). The illusion must be maintained that clowns are valuable. Therefore, we will use our stock (re: funny money) as a currency and buy Merrill at a premium to keep the illusion of value in tact… hopefully long enough to get us all out of the woods.”
That’s the best I can do. Totally weird.
September 14, 2008 at 9:51 PM in reply to: Lehman Said to Prepare Bankruptcy as Buyers Withdraw (BofA to pick up Merril Lynch) #270629Participant[quote=TheBreeze]Why is BofA paying a premium for MER? And why such a massive premium? MER was trading for $17 on Friday and BofA is going to pay $29.
That’s ridiculous. The gubmint must be involved somehow.[/quote]
In this whole bizarre mess, the price BofA is paying for Merrill is the most bizarre. Normally I can come up with some oddball potential explanation. But this one? Can’t do it. I’m mystified.
But I’m assuming it has some tie into saving BofA’s ass in the end. For example, if allowing Merrill to fail after Lehman failed then caused BofA to go down the tubes as a result (due to a lack of confidence in the system) then MAYBE BofA figured: “We’re the only party that can buy these clowns and we have to make it look like all of the clowns are worth something. Because if the clowns aren’t worth anything, then we’re not worth anything (even though we’re a money center bank – a higher caliber of clown than the investment banks). The illusion must be maintained that clowns are valuable. Therefore, we will use our stock (re: funny money) as a currency and buy Merrill at a premium to keep the illusion of value in tact… hopefully long enough to get us all out of the woods.”
That’s the best I can do. Totally weird.
Participant[quote=davelj]Given what’s transpired with Ambac, MBIA, Bear Stearns, Allied Capital and now Freddie and Fannie, betting against Ackman and Einhorn on the financials has proved hazardous to one’s net worth. Is there any reason to think that Einhorn’s gotten it wrong on Lehman? Not that I can see.[/quote]
As I suspected.
Einhorn 1, Lehman 0 – Game Over
Participant[quote=davelj]Given what’s transpired with Ambac, MBIA, Bear Stearns, Allied Capital and now Freddie and Fannie, betting against Ackman and Einhorn on the financials has proved hazardous to one’s net worth. Is there any reason to think that Einhorn’s gotten it wrong on Lehman? Not that I can see.[/quote]
As I suspected.
Einhorn 1, Lehman 0 – Game Over
Participant[quote=davelj]Given what’s transpired with Ambac, MBIA, Bear Stearns, Allied Capital and now Freddie and Fannie, betting against Ackman and Einhorn on the financials has proved hazardous to one’s net worth. Is there any reason to think that Einhorn’s gotten it wrong on Lehman? Not that I can see.[/quote]
As I suspected.
Einhorn 1, Lehman 0 – Game Over
Participant[quote=davelj]Given what’s transpired with Ambac, MBIA, Bear Stearns, Allied Capital and now Freddie and Fannie, betting against Ackman and Einhorn on the financials has proved hazardous to one’s net worth. Is there any reason to think that Einhorn’s gotten it wrong on Lehman? Not that I can see.[/quote]
As I suspected.
Einhorn 1, Lehman 0 – Game Over
Participant[quote=davelj]Given what’s transpired with Ambac, MBIA, Bear Stearns, Allied Capital and now Freddie and Fannie, betting against Ackman and Einhorn on the financials has proved hazardous to one’s net worth. Is there any reason to think that Einhorn’s gotten it wrong on Lehman? Not that I can see.[/quote]
As I suspected.
Einhorn 1, Lehman 0 – Game Over
September 13, 2008 at 7:39 PM in reply to: Lehman Bailout this Weekend (Bear Stearns replay) #269867Participant99.8% of the world is long financial assets. Yes, the market “should” go down on Monday. Of course it “should” be much lower than it is currently. The Establishment, however, knows that 99.8% of the world is long financial assets and THAT is their constituency. And they will appeal to that constituency. Therefore, expect them to do what they always do: attempt to protect the longs. The shorts and cash horders are the distinct minority and thus irrelevant to the Establishment. Ultimately this pandering will fail, of course. You can put the law of supply and demand on hold for a while, but you can’t suspend it ad infinitum. Nothing would surprise me for Monday. A moonshot OR a total meltdown. Either is possible. But don’t ever forget that the Establishment will do whatever it can to protect its constituency: those long financial assets. If we have a meltdown Monday, it won’t be for lack of effort on the Establishment’s part. It’s just that they will finally have failed and the market will have acknowledged that ultimately economics and markets will trump the Establishment’s voodoo… which can keep people hypnotized for a looooooong time, as we have seen.
September 13, 2008 at 7:39 PM in reply to: Lehman Bailout this Weekend (Bear Stearns replay) #270098Participant99.8% of the world is long financial assets. Yes, the market “should” go down on Monday. Of course it “should” be much lower than it is currently. The Establishment, however, knows that 99.8% of the world is long financial assets and THAT is their constituency. And they will appeal to that constituency. Therefore, expect them to do what they always do: attempt to protect the longs. The shorts and cash horders are the distinct minority and thus irrelevant to the Establishment. Ultimately this pandering will fail, of course. You can put the law of supply and demand on hold for a while, but you can’t suspend it ad infinitum. Nothing would surprise me for Monday. A moonshot OR a total meltdown. Either is possible. But don’t ever forget that the Establishment will do whatever it can to protect its constituency: those long financial assets. If we have a meltdown Monday, it won’t be for lack of effort on the Establishment’s part. It’s just that they will finally have failed and the market will have acknowledged that ultimately economics and markets will trump the Establishment’s voodoo… which can keep people hypnotized for a looooooong time, as we have seen.
September 13, 2008 at 7:39 PM in reply to: Lehman Bailout this Weekend (Bear Stearns replay) #270105Participant99.8% of the world is long financial assets. Yes, the market “should” go down on Monday. Of course it “should” be much lower than it is currently. The Establishment, however, knows that 99.8% of the world is long financial assets and THAT is their constituency. And they will appeal to that constituency. Therefore, expect them to do what they always do: attempt to protect the longs. The shorts and cash horders are the distinct minority and thus irrelevant to the Establishment. Ultimately this pandering will fail, of course. You can put the law of supply and demand on hold for a while, but you can’t suspend it ad infinitum. Nothing would surprise me for Monday. A moonshot OR a total meltdown. Either is possible. But don’t ever forget that the Establishment will do whatever it can to protect its constituency: those long financial assets. If we have a meltdown Monday, it won’t be for lack of effort on the Establishment’s part. It’s just that they will finally have failed and the market will have acknowledged that ultimately economics and markets will trump the Establishment’s voodoo… which can keep people hypnotized for a looooooong time, as we have seen.
September 13, 2008 at 7:39 PM in reply to: Lehman Bailout this Weekend (Bear Stearns replay) #270152Participant99.8% of the world is long financial assets. Yes, the market “should” go down on Monday. Of course it “should” be much lower than it is currently. The Establishment, however, knows that 99.8% of the world is long financial assets and THAT is their constituency. And they will appeal to that constituency. Therefore, expect them to do what they always do: attempt to protect the longs. The shorts and cash horders are the distinct minority and thus irrelevant to the Establishment. Ultimately this pandering will fail, of course. You can put the law of supply and demand on hold for a while, but you can’t suspend it ad infinitum. Nothing would surprise me for Monday. A moonshot OR a total meltdown. Either is possible. But don’t ever forget that the Establishment will do whatever it can to protect its constituency: those long financial assets. If we have a meltdown Monday, it won’t be for lack of effort on the Establishment’s part. It’s just that they will finally have failed and the market will have acknowledged that ultimately economics and markets will trump the Establishment’s voodoo… which can keep people hypnotized for a looooooong time, as we have seen.
September 13, 2008 at 7:39 PM in reply to: Lehman Bailout this Weekend (Bear Stearns replay) #270181Participant99.8% of the world is long financial assets. Yes, the market “should” go down on Monday. Of course it “should” be much lower than it is currently. The Establishment, however, knows that 99.8% of the world is long financial assets and THAT is their constituency. And they will appeal to that constituency. Therefore, expect them to do what they always do: attempt to protect the longs. The shorts and cash horders are the distinct minority and thus irrelevant to the Establishment. Ultimately this pandering will fail, of course. You can put the law of supply and demand on hold for a while, but you can’t suspend it ad infinitum. Nothing would surprise me for Monday. A moonshot OR a total meltdown. Either is possible. But don’t ever forget that the Establishment will do whatever it can to protect its constituency: those long financial assets. If we have a meltdown Monday, it won’t be for lack of effort on the Establishment’s part. It’s just that they will finally have failed and the market will have acknowledged that ultimately economics and markets will trump the Establishment’s voodoo… which can keep people hypnotized for a looooooong time, as we have seen.
Participant[quote=cooprider]Depends how you look at it.
You can still make millions off people you screw over, run a world class company into the ground, land with a $50 million golden parachute while your peons file bankruptcy, have multiple 10 digit bank accounts, an IQ of 160, and become a industry specialist making $50000/hr training fortune 500 companies how to do the same thing you did and still be an idiot.
Why? Because it’s happening.
Call it karma, fate, judgement, yin yang or whatever you like, but eventually what goes around comes around in this life or the next, or worse, your kids.
Not realizing all actions have a consequence makes you an idiot in my book. Not caring is even worse.[/quote]
Other than taxpayers, who are truly getting screwed (they didn’t ask to participate in the first place), I’m not sure who else is getting “screwed” when these firms go belly-up. The investors should all understand the risks. So long as fraud is not being committed there are no investment victims; just willing participants who lost. Likewise with the employees. I just don’t see the “screwing” going on other than at the taxpayer level.
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