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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 421.29-0.5%Jan 16 4:00 PM EST
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To: TobagoJack who wrote (31227)3/18/2008 1:13:37 PM
From: pogohere  Read Replies (1) of 219502
 
"That sets the stage for an orderly consolidation of the system, in which major banks with strong balance sheets use short-term Fed money to acquire weak and failing institutions without having to pull liquidity out of the system by using their own money or trying to borrow money from banks. In effect, the Fed created a situation where other institutions in the same condition as Bear Stearns can be merged into healthier entities without the need for this weekend’s urgent scramble."

Very interesting. This parallels what happened in the 1930s, when, as some believe, the Fed engineered the collapse after providing credit to consolidators, who were then wiped out and the consolidations swept up for peanuts. E.g., Standard Brands.

"JPMorgan Chase — a huge bank with a strong balance sheet . . ." Problem here is those Level 3 assets in the closet: JPM has boat loads. Didn't have those in the 1930s, so students like Bernanke need to beware.

"the markets are saying that the liquidity crisis is being managed: "The market can stay irrational longer than you can stay solvent." Keynes

"We continue to believe that petrodollars and Chinese dollars are stabilizing the American system." Gee, there's two pillars we can always rely on, huh?
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