-- Posted Sunday, 14 September 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
“Phenomenally accurate forecasts”
The Great American Bailout Burlesque has taken an unexpected turn over the weekend. Here it is mid-day Sunday and no white knight has been announced yet to take over Lehman Brothers with a little help from the Federal Government. B of A was being floated as a possible suitor, but we doubt that such a ruse would fool even the dolts whose opinions taint CNBC and the nation’s op-ed pages. The only good we could imagine coming from a Bank of America takeover of Lehman is that it might provide the emetic B of A needs to expel the toxic dose of Countrywide that it imbibed a while back.
Clearly, this is not the good old days of the S&L bailout. Back then, anyone with a hole in his butt could walk into a Resolution Trust Corp. office and do a $10 million deal with nothing down. The avuncular Bill Seidman was ready to deal, and if the price wasn’t right, then dadgummit, he made it right. This time around, the stakes are much higher. Buyers have to at least look like they could ante up $1 billion of spurious collateral in order to keep inquisitive Congressionmen at bay, and the publicly traded shares of the company doing the acquiring cannot appear to have gone down the crapper. By our reckoning, Goldman Sachs is about the only firm that could pass muster with Central Casting. We suspect, however, that Goldman is being detained in the wings so that it can rescue the U.S. Treasury when the time comes.
Straight-Men
Meanwhile, as the clock ticks toward the opening of global securities markets Sunday night, Paulson and Bernanke are playing it straight, somberly insisting that nothing on earth could induce them to put taxpayer dollars at risk to save Lehman. Talk about closing the barn door after the cows have gotten out! It was just a week ago that these clowns put taxpayers on the hook for trillions of dollars in mortgage write-downs when they brought FannieFreddie under government conservatorship. To add insult to injury, the bailout umbrella was expanded to include not only such hardship cases as the central banks of Japan and China, but also holders of subordinate debt -- Goldman Sachs no doubt among them -- who by law and precedent should have come away empty handed, just like shareholders.
It’s a little late in the game for Treasury and the Fed to act like they’re playing hardball. Does anyone really believe this will make the inevitable bailout of Citigroup, or Bank of America, any easier? Paulson and Bernanke are just buying time, of course. But for what? is the question that looms larger with each flimsy new deal.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Sunday, 14 September 2008 | Digg This Article | Source: GoldSeek.com
