Moral Hazard - who’s kidding who?!
I just read the most amazing, outrageous thing. At yesterday’s testimony in front of the Senate Banking Committee, Bob Steel (Treasury Under Secretary) said that his boss (Treasury Secretary Hank Paulson) set it up for JP Morgan to buy Bear Stearns at the low ball price of $2 per share. (Just one week prior Bear’s stock was trading at $70.)
It is now clear that the $2 stock price offer (which was orchestrated by Paulson and Bernanke) would justify the government’s highly criticized $30bn bailout of Bear. (“We had to bail out Bear. It was a sinking ship. Look, it was only worth $2 per share.”)
Bear had to accept any offer that was given to it. It was desperate and in no position to negotiate price. The Fed and Treasury hand picked JP Morgan and told them: “if you buy Bear Stearns and save our collective political asses, we will “give” Bear to you for $2 per share.”
Remember, Bear’s stock price traded at $70 one week prior to this and $170 12 months ago. So the Fed and Treasury screwed Bear’s employees and shareholders by giving away the company for $2 per share. Why did they do this? To save their political futures – that’s why.
At the end of the day, even JP Morgan could not get away with this crime. So they eventually bought Bear for $10 per share. Still pretty damn cheap.
Bob Steel had better watch out. His old Goldman buddy Hank might be in trouble - big trouble. The Democrats have a huge incentive to go after Hank for his blatant cronyism. Hank threw Bear shareholders under the bus to temporarily save is butt. He might just throw Steel under the bus next.
Moral hazard my foot. Physical hazard is more like it. Heads are going to roll for this circus act.
Hugo Chavez is in trouble.
The obvious question is why Chavez paid the FARC $300 million for the release of the hostages last month? This “ransom” payment severed two purposes. It bought Chavez some much-needed positive international PR. For a brief moment, he could grab international headlines for something positive. It also gave Chavez an easy way to pay back the FARC for the $150,000 they “lent” him back in 1992 when he was sitting in jail for a failed coup d’état. That’s a 60% annual ROI for the FARC for the past 16 years. Quite an investment!
Now that Colombian officials possess the FARC’s computer records showing a long trail of Chavista FARC support, Chavez has reason to be nervous. His Venezuelan support base is poorer, hungrier, and getting tired of Hugo’s false promises. Now, they have a smoking gun – their red-beret wearing, outspoken leader has been a pillar of support for the feared and hated FARC. The biggest danger is that Chavez will do something stupid in a desperate attempt to show strength.
As I write, he is moving troops to the Colombian border. This should be interesting.
Review of the movie “Glory” (1998)
Review of the Movie Glory:OK. I was looking for a great movie to watch - an oldie but goodie. I found it… “Glory” (1998). Wow! This movie was terrific. It literally has changed my life.
Having grown up in Florida (very loosely defined as “the South”), I grew up with the mental Civil War image of white Union soldiers marching through the South fighting their fellow Americans to rid the Confederacy of slavery. I knew the war was brutal and bloody, but I (naively) thought it was white men fighting each other.Then I learned of the 54th. The 54th was a volunteer militia made up of free black men – most of which were second generation free blacks – who volunteered to fight to end slavery. The 54th were trained in Boston but were recruited from all over – as far away as Canada. (The city that sent the most recruits was Oberlin, Ohio!?)
The 54th was led by Col. Robert Gould Shaw – a white man commissioned to lead this motley crew. Shaw reluctantly accepted the charge – a call to action that was hardly seen as a worthy (and certainly not a well-respected) leadership position among senior military officers).
“Glory” is a movie that documents the growth of Col. Shaw and the 54th – both individually and together. Shaw learns to respect and admire his troops. The black troops triumph over all odds and prove to be awe-inspiring heroes of the Civil War.
This movie will inspire you and change your life.
Dr. Mortimer J. Buckley’s obituary
If you need to renew your faith in humanity that there are people who still live their lives to serve others, take a moment to read the following obituary of a great man who passed away last month. In the spirit of full disclosure, Dr. Buckley is my father-in-law.
http://www.boston.com/bostonglobe/obituaries/articles/2007/12/01/mortimer_buckley_mgh_cardiac_surgery_chief/?p1=email_to_a_friend
How big will the iPhone be?
When I travel, there are two things I can’t live without: my Blackberry and my iPod.
I love my Blackberry because I can get email and surf the internet (albeit poorly). It’s gotten to the point that I do NOT travel with my laptop anymore.
I love my iPod b/c it has all my music but more importantly, my video iPod has movies, audio books, and recordings of important conference calls that I didn’t have time to listen to live. Here’s my question: will the iPhone replace both my video iPod and my Blackberry? Will the iPhone dethrone the ‘Bery from the corporate market? If it does, could this be the Trojan horse that allows Macs to gain marketshare in the corporate PC market? At this point, I’m not betting against this possibility!
I did it!
I escaped! On Sunday, June 3rd, I completed the Escape from Alcatraz Triathlon with a time of 3:23. The most challenging part of the race was the swim. Boy, was that water chilly! 55 degrees never felt so cold as it did when I jumped off the ferry into the San Francisco Bay at 7am last Sunday. Luckily the current was helping me as I swam from Alcatraz to Chrissy Field. After completing the 1.5 mile swim, the 18 mile bike and 8 mile run felt great.
The best news is that I was able to raise $10,000 for the Dana Farber Cancer Institute to help support Dr. Ken Anderson’s research in Multiple Myleoma. All the credit goes to very generous support from family and friends. Thank you!