Bubbles Burst and Banks Go Bust

Earlier this week I was enjoying Fizzy Lifting Drink and swimming among the bubbles whilst listening to the radio when I heard the financial report. Ordinarily I don't normally listen because I don't have much money, or any assets. Compared to what most people my age have, I have tuppence. That is merely due to the fact that I am a perpetual student and without a job.

But the words Lehman Brothers,large drop in the Dow Jones, largest bankruptcy in US history, came tumbling out of the radio. Well this caught my attention.

What the bloody hell was happening to the US financial market?

This is what I was able to gather although my mind is not so financially oriented.
Merrill Lynch was going to be sold to Bank of America.
AIG shares fell 95% and the Federal Reserve intervened.
Lehman Brothers filed chapter 11.


What does this all mean?
Should I be concerned? Should I hide my tuppence in my shoe? Whose fault was this? How could this happen?

A Possible Solution...Time to Reform Wall Street

There is a general problem in corporate America of stockholders being unable to effectively organize to rein in top management. This problem is most serious in the financial industry.

Thankfully, the credit crisis gives us the tools we need to rein in executive pay. Currently, the major surviving investment banks (e.g. Merrill Lynch, Morgan Stanley, Goldman Sachs) are operating on life support. They are drawing money at below-market interest rates from the Federal Reserve Board's discount window. This privilege (for which they pay nothing) can easily be worth billions of dollars a year.

These banks are also operating with an explicit guarantee from Fed Chairman Ben Bernanke to their creditors that he will honor their loans in the event that an investment bank, like Bear Stearns, goes belly up. This guarantee is enormously valuable. Investors who make loans to Merrill Lynch or Morgan Stanley don't have to worry about the health of these companies because Bernanke has said that, if necessary, he will use public money to pay them back.

While we don't want a chain reaction of banking collapses on Wall Street, the public should get something in exchange for Bernanke's generosity. Specifically, he can demand a cap on executive compensation (all compensation) of $2 million a year, in exchange for getting bailed out. For any bank that is not on board, Bernanke could make an explicit promise to their creditors - if the bank goes under, you will get zero from the Fed.

I have always been weary of bankers and investors since a young age after watching an ancient man sing about how great money is then try to steal from a little boy. I guess if I do enter the market I will tread lightly.

Imus ease on down the road!

Ease on down, Ease on down the road come on,
Ease on down, Ease on down the road
Don't you carry nothing that might be a load come on,
Ease on down Ease on down, down the road


I guess that Job was the load that was slowing Don Imus down, but now Imus can just ease on down the road. I am sure he will do fine and unfortunately this will probably be a boost to his career becaue he has risen out of obscurity and into the spotlight. I never heard of this guy and now he is notorious. Ok sure as a female...the term Ho does offend me but I will not just rant and rave about Imus, Bernard McGuirk is actually the one that referred to the players as Hard core Hoes.

True Imus took it further, but they continued with the racial remarks by referring to Jigaboos vs Wannabees. Some bloggers say cute Spike Lee reference. I disagree. First of all he cited the wrong Movie, so I am not so sure as to its innocent nature. Second having watched School Daze and many Spike Lee movies, their are funny parts and although represented in a musical style it was about a serious issue of divide within the Black community based on different shades of black.

Imus and friends seemed to miss the message of Spike Lee's little musical number. So when you do a joke about something and miss the essence it will probably come of as offensive. Being on the outside and never being able to identify with any part of his disparaging comment since he does not have ovaries or nappy hair , his weak attempt at an uncreative, relying on played out sterotypes joke came off as offensive.

I am all for free speech. He said what he said. People responded, advertisers pulled out and the companies he worked for decided to pledge allegiance to the almighty dollar then support his consistently offensive humor. So I guess Money Talks and Imus Walks.