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The Great
American Bail Out
By Rajesh
Sept. 21, 2008 |
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The website
of Lehman Brothers calls it an innovator in
global finance, serving the financial needs of
corporations, governments and municipalities,
institutional clients, and high net worth
individuals worldwide. Founded in 1850, Lehman
Brothers maintains leadership positions in
equity and fixed income sales, trading and
research, investment banking, private investment
management, asset management and private equity.
The Firm is headquartered in New York, with
regional headquarters in London and Tokyo, and
operates in a network of offices around the
world.
Lehman Brothers was founded in 1850 by two
cotton brokers in Montgomery, Alabama. The firm
moved to New York City after the Civil War and
grew into one of Wall Street's investment
giants. However, on Sept. 14, 2008, the
investment bank announced that it would file for
liquidation after huge losses in the mortgage
market and a loss of investor confidence
crippled it and it was unable to find a buyer.
What went wrong? The bank has about $600 billion
of assets supported by some $30 billion of
equity, meaning the value of its assets need
only decline by 5 percent to make the company
worthless. Now what is this? It is plain
madness. It is reckless behavior fueled by
unbridled greed. It is horrible speculation in a
unstable market which went terribly wrong.
So the American Government is expected to put in
billions of dollars of the taxpayers' money to
bail out a bunch of people who thought they were
gambling with some easy lottery money in a
casino. God help the tax payers.
Extending the logic a little further, when the
Indian Government tries to help, not bail out,
poor farmers, the WTO has problems with it. The
poor farmer had put in all he had but the
weather went against him. When a poor farmer
defaults on his loan for oxen even for the most
genuine reasons, like illness in the family and
the likes, he is treated like a free loader.
Everyone wants action against him.
Now watch how a bunch of greedy people whose
gambling burnt their houses down are being
salvaged at the cost of the American taxpayers
and no one thinks they should be held
responsible for their “innovations in global
finance”.
I hope the greedy world of today will learn a
few lessons from this “innovation”.
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Comments: |
Today, the Dow Jones slumped more
than 777 points registering the
single-day highest drop in the
history of the Wall Street closing
at 10,365.45 following the rejection
of the $700 billion bailout plan by
the House.
Just a few days ago, Republican
presidential nominee Senator John
McCain had said that the US economy
was 'fundamentally' strong. A few
months ago, Mr. McCain's chief
financial advisor Senator Phil Gramm
had declared the Americans had
become a 'bunch of whiners'.
Thank you Mr. Bush and thank you Mr.
McCain. Even though this financial
meltdown occurred on your watch,
somehow 'those whacky liberals' are
at fault for all this mess, right?
Yup, come Nov. 4 and I am running to
my polling station and casting my
ballot in favor of Mr. McSame and
the 'Pitbull Palin'. - A.
Dasgupta - Sept. 30, 2008 |
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