So long to Bear Sterns, Lehman, Merrill and....September 15, 2008
Mark on the markets Mark Patterson
So long Bear Sterns, Lehman, Merrill and….?
The news on Sunday evening was sad, but not surprising. I sumise the situation happened like this. Lehman calls the head of treasury and tells Henry Paulson that they have not been able to find a buyer, and would they reconsider a bailout. The treasury secretary says “no bailout”. AIG is on the cusp of failure and at the time of this writing the outcome is unknown. Merrill Lynch is also in trouble and given an ultimatum by Paulson. Either allow a sale to Bank of America or you are on your own to find a buyer. Morgan Stanley was interested in Merrill, but they were only given 48 hours to do their due diligence. Not enough time. Because the potential losses for Merrill are still unknown, my opinion is that our treasury gave assurance to Bank of America, that if the losses incurred by the Merrill acquisition were debilitating to Bank of America, the Government would bailout BOA but would not bailout a private buyer that was not “to big to fail”.
Back room deals? Yes, but the treasury is attempting to prevent a possible banking disaster.
What can we learn from this? Never say never, and do not keep all your money in one basket. Especially one with holes in it.
A few months ago, many declared the worst of the banking crisis over.
I predict you will hear that again soon, if you choose to believe it you would be considered an optimist. While we all want this to be over, so we can move on and stabilize these markets, I have to caution you that these problems run far and deep.
You may see the Fed step in with additional cuts that I believe will cause a short term rally. My suggestion would be to lighten up on your stock holdings or mutual funds if you get an opportunity. Do not keep more than the FDIC or SIPC limits with any financial firm.
Mark Patterson is a registered investment advisor and commodity trading advisor with MHP Asset management LLC, and can be reached at 447-1978 or Mark@MHP-Asset.com
MHP Asset Management, LLC
P.O. Box 460, Conway, NH 03818
Phone: 603-447-1979 Fax: 603-941-0904 |
All Articles
Fraud and scam awareness
January 22, 2009 January effect
January 6, 2009 2008 was a doozy
December 22, 2008 4,000 Dow?
December 10, 2008 More of the same
November 11, 2008 Dead Cat bounce and falling knifes
November 5, 2008 Psychology of the investor
October 28, 2008 Whipsawed capitulation
October 14, 2008 Another two bite the dust
September 30, 2008 So long to Bear Sterns, Lehman, Merrill and....
September 15, 2008 Investment Objectives and risk
September 2, 2008 Oil, Gold and Stocks
August 17, 2008 Embrace Market Volatility
August 5, 2008 Foreign Exchange (FOREX)
July 23, 2008 Where do we go from here?
July 8, 2008 Alternative may be primary
June 24, 2008 Crisis, Crisis Everywhere
June 11, 2008 Deflation + Inflation=Stagflation
May 27, 2008 12B1 AND ABC
May 13, 2008 ANNUTIES: THE GOOD, THE BAD, THE UGLY
April 30, 2008 DOLLAR DEMISE
April 15, 2008 Making money in a yucky market
March 31, 2008 Bear Stearns and a bear market
March 17, 2008 State of the markets
February 28, 2008 A Fairy Tale
February 8, 2008 Better to be the Vulture than the Meat
January 28, 2008 Dead Cat Bounce
January 15, 2008 Best of 2007
December 31, 2007 Stagflation
December 18, 2007 Bad news is good news
December 5, 2007 Smart money Dumb money
November 21, 2007 Bank unraveling
November 6, 2007 Black Monday
October 23, 2007 History Lessons
October 9, 2007 Gas Demand and Destruction
April 25, 2007 The Fed's Dilemma
March 10, 2007 Protecting Profits
February 28, 2007 Trade With the Pros
January 1, 2007 Real Investment Diversification
November 10, 2006 Psychology of the investor
|