Dante Posted April 2, 2008 Share Posted April 2, 2008 Sorry if any of this is talked about within the "Mortgage Meltdown" thread. I would never pretend to know a lot about the market or high level financial dealings. However this just does not seem right to me. I look at any kind of financial investment such as stocks or lending money as gambles and kind of easy money if it works out for you. Simply because you are not really producing anything yourself to make money. Don't get me wrong I don't think there is anything wrong with that. If you have earned the money at to do so you have every right to. However with this gamble type business there should be responsibilities to go with it. Like having to pay when you lose! In other words, if you want to play the game you better be prepared to deal with the consequences if things go for a sh--. I have to get up every morning at 5.30 and work until 5.30pm to make my way and I don't complain. If our little company goes under who is going to bail us out?? Most of our competition is in LA or Mexico where labor is dirt cheap so we are constantly battling but we pay our guys well. Anyway, I digress. http://money.cnn.com/news/newsfeeds/articl...13-24177467.htm Link to comment Share on other sites More sharing options...
DC Tom Posted April 2, 2008 Share Posted April 2, 2008 If our little company goes under who is going to bail us out?? It's very simple: if your little company goes under, does it take the global credit markets with it? Didn't think so. Link to comment Share on other sites More sharing options...
TPS Posted April 2, 2008 Share Posted April 2, 2008 It's very simple: if your little company goes under, does it take the global credit markets with it? Didn't think so. This is a nice little summary of things: Money editorial although I disagree with how he tries to tie the Fed's bailout to taxpayers paying for it. In a world of fiat currencies, we'll pay for this via the inflating currency. Link to comment Share on other sites More sharing options...
GG Posted April 2, 2008 Share Posted April 2, 2008 A little primer on bankruptcies: The goal of US laws is to try to ease the strain on the company caused by excessive debt, not to punish a deadbeat borrower. In a perfect bankruptcy, the company survives with less debt, but it's previous owners get wiped out. In that process, the payment pecking order is employee salaries, advisors (accountants/lawyers), key vendors needed to keep the lights on, general creditors, and finally the owners. If the company doesn't survive a bankruptcy, creditors get paid out first out of the carcass and stock investors have to wait until anything is left for them. In most bankruptcies, somebody has to put up new money to keep the operations going, and usually those people get to own the company and are first in line to get paid out. The rationale is that without the new money, a company will die and everybody loses. So, how does this parallel Bear Stearns? Easy. The Fed & Treasury short-circuited the BS bankruptcy by achieving the same result in a one-day period that would have occurred over 12+ months. The BS' creditors were made whole, JPM ended up owning the company by putting new money in, while BS investors & employees basically got wiped out. Not too different than what would likely happen to your or another company that files bankruptcy. It just happened over a weekend, instead of over a year or two. This was no bailout of Bear Stearns. Link to comment Share on other sites More sharing options...
colin Posted April 4, 2008 Share Posted April 4, 2008 there certainly was a bail out tho -- the people long bear stearns credit were bailed out in a huge way. taking financial risk is certainly not easy money, and it mischaracterises it to say that it is making money without producing anything. risk taking is important for economic transactions and the economy as a whole -- the rub in this instance is people who took the ultimately wrong risk of being long BS credit don't get the sting they should. Link to comment Share on other sites More sharing options...
todd Posted April 8, 2008 Share Posted April 8, 2008 It's very simple: if your little company goes under, does it take the global credit markets with it? Didn't think so. Here's the lesson to be taught to all: You make stupid business decisions on a grand scale, we'll help you out. Enjoy your parachutes. If your small company makes stupid decisions, stfu. Not the lesson I will be teaching our young. Whatever happened to personal responsibility? And since we have corporate personhood, corporations should be more responsible as well. As should the idiots deciding they could afford these mortgages, when it was clear to a 4th grader that they would be screwed in 5 years. Idiots, all. Link to comment Share on other sites More sharing options...
meazza Posted April 9, 2008 Share Posted April 9, 2008 there certainly was a bail out tho -- the people long bear stearns credit were bailed out in a huge way. taking financial risk is certainly not easy money, and it mischaracterises it to say that it is making money without producing anything. risk taking is important for economic transactions and the economy as a whole -- the rub in this instance is people who took the ultimately wrong risk of being long BS credit don't get the sting they should. I think pretty much most big brokers are long bear sterns credit... Link to comment Share on other sites More sharing options...
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