just about everything we knew that brk owned
(coke, gillette, etc.) is in trouble. question is, do we
still own it? and question 2, what's warren doing? time
to buy yet? i would guess he's inching into things.
.............I don't think the skid is over by a
long shot, so I don't see WEB deploying money for a
while......if he's going to buy another company for us, it will
be smarter to wait IMHO........also IMHO these
things play themselves out slowly.........in the fall of
'29 the market peaked on Sept 3........panicked on
Oct 29.......and bottomed for the year in mid Nov.
And then a little bull began; which crested followed
by the long, painful desent into the cruelest of all
the years.....1932. By then, fistfights were breaking
out in bank lobbies.....those that weren't shut down
that is. A lot of the blame for those times was laid
at the door of wild margin trading. Well, they got a
new name for it nowdays.......it's called hedge-fund
"leverage"............the beat goes on........
WEB was quoted saying "derivative" should be
outlawed. If it can't be explained to even intelligent
investors in simple terms, there must be fatal loop hole
lying within. Such financial device can only cause more
gruesome troubles in the future by financial crooks. The
small thief get caught, the big one get bailed out.
.........an interesting sidebar to the
tale...........WEB's offer was contingent on the resignation of LTCM's
management.........the banks however were willing to leave LTCM
management in place.........they said that the LTCM was so
complicated that only LCTM people could run it...."meet the
new boss,same as the old boss"............
This is an excerpt, for the full story, see AIG's
NEWS section on Yahoo.
Q&A About Hedge
By MARCY GORDON
AP Business Writer
WASHINGTON (AP) -- Hedge funds are under close scrutiny
because of the $3.6 billion private bailout last week of
Long-Term Capital Management LP, facilitated by the Federal
Reserve Bank of New York. Outside of Wall Street, little
is known about these secretive and largely
unregulated investment funds.
Here, in question and
answer form, is a look at hedge funds
was running Long-Term Capital when it got into
A: The 4-year-old fund's chairman, John
Meriwether, is one of Wall Street's most celebrated traders.
His senior partners include two Nobel laureate
economists and a former vice chairman of the Federal
Reserve. The fund is based in Greenwich, Conn.
What happened in the past few weeks when Long-Term
Capital nearly collapsed?
A: A group of major
banks and brokerage firms began talks about chipping in
to save it, with officials of the Federal Reserve
Bank of New York acting as facilitators and providing
At one point, the fund's managers
reportedly turned down a $250 million buyout offer by
legendary investor Warren Buffett, American International
Group Inc. (NYSE:AIG) and Goldman Sachs. The offer was
conditioned on Meriwether being ousted.
When it was
over, the group of banks and brokerage houses had
agreed to put up $3.6 billion to rescue Long-Term
Capital and take control of it. In addition to the three
banks mentioned above, the group also includes
brokerage houses Merrill Lynch & Co. (NYSE:MER), Morgan
Stanley Dean Witter, Goldman Sachs, Salomon Smith Barney
and several big European banks.
"I doubt LTCM is that stupid. Already more than 3
billions injected to LTCM, not that desparate. Wall Street
to a dirt cheap impression to WEB. Maybe
80 cents for 1 buck. "
accepted .10 for a buck.
They didn't really get
bailed out. They just found a buyer who wouldn't
fire-sale the holdings. The investors don't own anything
anymore, they get to split 450 million.
savings here is the market, which doesn't suffer all the
selling, and maybe the banks, if they got a good buy for
the fund. That will remain to be seen.
........I think the problem Congress has with
this deal is that 3 of the banks come under the FDIC
safety net........so, if a bank melts down over this
bailout, the taxpayers will have to clean up this
mess.........the old S&L mess deja' vu.......
........I think the problem Congress
has with this deal is that 3 of the banks come under
the FDIC safety net........so, if a
down over this bailout, the taxpayers will have to
clean up this mess.........the old S&L mess deja'
Very good point...that would severely
piss me off...
Thank you Marilyn Vos Savant of Parade
Fewer profanities, better spelling, neater typing, more
Goals of the Yahoo! Message
Board Robot Patrol.
The spelling of "Salomon"
probably got butchered on Ellis Island. Whatever happened