If JP Morgan or Bank of America fail now, then forget it, we’re done.

So much for confidence in the American people.

terryannonline on September 15, 2008 at 7:11 PM

It’s called being realistic, pal. Should one of the those two fall through there is no physical way to recover, especially taken in context of the current disaster that is our nation’s finances.

Today was a tough day. No one can deny that. But Paulson is on the right track by taking the stand that risk and failure should not be rewarded by bail-outs. Let the market forces take the hit. We all knew this was coming because no one put the hedge-funders in check. Keep the government out of the market and let the chips fall. It may well take more than a year to correct this and a recession may very well be the healthy correction this nation needs, but this is hardly a recipe for a depression.

Rovin on September 15, 2008 at 9:43 PM

Brilliant thoughts…except for one thing.

The government IS going to bail them out. Know why? Because tinfoil-hat theories aside, Congress is so in bed with big business they might as well be a mattress. We the people are gonna get stuck with BILLIONS of debt we don’t deserve.

I’m quite sure there will be Sarah Palin dolls to, um, stick, something, uh, pins, yeah, that’s it….

Brisk sales, you betcha.

The Monster on September 15, 2008 at 6:13 PM

I think the answer to that is “Aww, jeeez”.

This is potentially Depression-level bad. Potentially. It remains to be seen how bad things are. The fact that the government is still cooking the accounting books of Freddie/Fannie and not including the 5 trillion guarantee on its books is bad. People are trying to downplay the news, but the bottom line is that the US Taxpayer is on the hook for that 5 trillion of assets, much of which could be bad loans that are worth nothing.

With all due respect Sydney, do you know how infantile this statement sounds? Tangible assets are hardly worth nothing. There are REAL assets that are viable here. “Bad loans” for what? Real property that may be lost by the unqualified owner, but still real property–ASSETS.

Today was a tough day. No one can deny that. But Paulson is on the right track by taking the stand that risk and failure should not be rewarded by bail-outs. Let the market forces take the hit. We all knew this was coming because no one put the hedge-funders in check. Keep the government out of the market and let the chips fall. It may well take more than a year to correct this and a recession may very well be the healthy correction this nation needs, but this is hardly a recipe for a depression.

Even of those guys donated to the Democrats, losing your job for something the higher-ups did isn’t fair.

Sydney Carton on September 15, 2008 at 5:57 PM

Problem: there is no fairness involved with having or loosing a job.

Part of the problem in the US (& world) is the idea that it does.

I don’t think that’s what he meant by “many people were ruined today.” Say you’re a 45 year old dealmaker who’s worked at Lehman for 15 years. You’re fired. Now you’re too old to start a new career, because nobody hires anyone that old, and you’re too young to retire. What do you do?

Sydney Carton on September 15, 2008 at 6:28 PM

Ray Kroc did not own his first McDonalds until he was 51.

If JP Morgan or Bank of America fail now, then forget it, we’re done.

So much for confidence in the American people.

jukin on September 15, 2008 at 6:42 PM

You’re right. It’s MUCH, MUCH WORSE.

This is potentially Depression-level bad. Potentially. It remains to be seen how bad things are. The fact that the government is still cooking the accounting books of Freddie/Fannie and not including the 5 trillion guarantee on its books is bad. People are trying to downplay the news, but the bottom line is that the US Taxpayer is on the hook for that 5 trillion of assets, much of which could be bad loans that are worth nothing.

Lehman Bros. had to fail. The irony is, now that Merrill Lynch is merging with Bank of America, and JP Morgan has control of Bear Sterns, there REALLY are companies now that are “too big to fail.” If JP Morgan or Bank of America fail now, then forget it, we’re done.

jukin on September 15, 2008 at 6:42 PM

No, this is a lot worse than the dot com meltdown. The dot com meltdown involved fake companies. The commercial paper the investment banks hold/held are still opaque. No one knows where this is going end.

This could be a lot worse before it gets better. Because the only way the economy will improve is if banks loan out money, and if they don’t have the money to loan out money the economy won’t expand. So lets stop playing partisan politics here. This is a serious problem we are in right now.

We’ll all make tons of dough and they’ll be broker as a result of our entrepreneurism.

I don’t think that’s what he meant by “many people were ruined today.” Say you’re a 45 year old dealmaker who’s worked at Lehman for 15 years. You’re fired. Now you’re too old to start a new career, because nobody hires anyone that old, and you’re too young to retire. What do you do?

I’d guess try to get a job at another firm, maybe where the people who have invested through Lehman will move their accounts, perhaps at a somewhat lower salary. That’s not “ruin” though. It’s just a reduction in income.

If that were what he meant, why did he explicitly discuss the people who will lose their jobs?:

Many people were ruined today and many people are going to lose the jobs as a result of what happened today.

My guess is that he’s feeding the fears that people who have invested their money through Lehman will lose their shorts. They haven’t been “ruined”, because they still own the securities they purchased. It’s just the Lehman people (stockholders and employees) who are in big trouble.

Say you’re a 45 47 year old dealmaker who’s worked in Chicago at Lehman for 15 11 years. You’re fired. Now you’re too old to start a new career, because nobody hires anyone that old, and you’re too young to retire. What do you do?

Sydney Carton on September 15, 2008 at 6:28 PM

Write 2 memoirs and run for President?

I don’t think that’s what he meant by “many people were ruined today.” Say you’re a 45 year old dealmaker who’s worked at Lehman for 15 years. You’re fired. Now you’re too old to start a new career, because nobody hires anyone that old, and you’re too young to retire. What do you do?

My favorite was an interview with the 9-11 hijackers in Hell…with all the features, presumably, of an Islamic version of Hell (and ol’ Uncle Mo had quite the imagination!)….

…as I remember it, they were all quite upset that, having been promised virgins, they were instead being disembowelled eternally…the interview with one an interruption of the hijacker receiving the intimate attentions of some Islamic bogeyman with…er…hmmm…er…a barbed love minaret….

…gotta love the Onion….

Many people were ruined today

Only people who had their life savings in Lehman stock, instead of a diversified portfolio or a mutual fund to minimize the risk of a single investment going south.

Ever hear the saying “don’t put all your eggs in one basket”? Anyone who lacks the judgement to follow that ancient wisdom ought to recuse himself from electing the government that purports to regulate investment markets.

So the Lehman employees to donated to the Democrats are cultural liberals. They probably want abortion to be legal so that when they knock up their secretaries, they won’t have to pay child support.

Maybe they can make Sarah Palin dolls to stick pins in or something.

I’m quite sure there will be Sarah Palin dolls to, um, stick, something, uh, pins, yeah, that’s it….

Brisk sales, you betcha.