Tis Thee

Not me!

It's his money, so it's ok.

We Know Nothing

WSJ (03.20.08):

"The collapse of Bear Stearns Cos. dealt a severe blow to investors, from big names like billionaire Joseph Lewis to thousands of employees of the brokerage firm.

But there's one group trying to contain their joy amid all the gloom on Wall Street: Investors who placed big bets against Bear Stearns.

Some Traders Win Big

"Large hedge funds -- including Harbinger Capital Partners, Greenlight Capital, Tremblant Capital Group and Paulson & Co. -- made millions of dollars as Bear Stearns's shares tumbled and various bearish positions rose in value, according to securities filings and people close to the firms."

Reuters (03.20.08):

"The Securities and Exchange Commission is investigating the events leading up to the collapse of Bear Stearns, specifically a surge in options contracts betting that the investment bank's share price would fall sharply, according to the Wall Street Journal

Citing people familiar with the matter, the paper reported the SEC probe focuses on a surge last week in 'put' options that came days before the firm's proposed sale to J.P. Morgan Chase & Co. for stock now valued at about $278.5 million, or $2.32 a share."

SEC probing options activity in Bear Stearns

Merely a coincidence, no doubt.

When All Else Fails

The Jolly Bankers want you to pick up the tab for their greed and stupidity. Free market capitalism at its finest. WSJ (02.14.08), via Calculated Risk:

"The banking industry, struggling to contain the fallout from the mortgage debacle, is urgently shopping proposals to Congress and the Bush administration that could shift some of the risk for troubled loans to the federal government.

One proposal, advanced by officials at Credit Suisse Group, would expand the scope of loans guaranteed by the Federal Housing Administration.

Worried Bankers Seek to Shift Risk to Uncle Sam

"The proposal would let the FHA guarantee mortgage refinancings by some delinquent borrowers."

Boy. The joke would really be on you if they got this through, eh?

Your Marketplace At Work

Free market capitalism? Ha! There ain't no such thing. This is how it really works. LATimes (12.02.07):

"Shortly after the Sept. 11, 2001, terrorist attacks and the subsequent anthrax mailings, top U.S. science advisors said the country 'urgently needed' a new, improved anthrax vaccine.

The existing vaccine often caused swollen arms and muscle and joint pain. Inoculation required six injections over 18 months, followed by yearly booster shots. The estimated shelf life was just three years."

New anthrax vaccine doomed by lobbying

"The scientists' report, issued by the Institute of Medicine, called for 'an anthrax vaccine free of these drawbacks' -- a vaccine that would require only two or three injections, achieve protection within 30 days, stay potent for a long time and cause fewer adverse reactions."

Should've been a no-brainer, right? Think again. "Yet nearly six years later, the old vaccine is still the only one available -- and the government is buying it in mass quantities for the Strategic National Stockpile."

How did they pull that off? Simple. Lobbyists and bribery. "The manufacturer, Emergent BioSolutions Inc. of Rockville, Md., prevailed in a bitter struggle with a rival company that was preparing what federal health officials expected to be a superior vaccine. The episode illustrates the clout wielded by well-connected lobbyists over billions in spending for the Bush administration's anti-terrorism program.

"Emergent's rival, VaxGen Inc. of South San Francisco, had spent four years developing a new anthrax vaccine and had won an $877.5-million federal contract to deliver enough doses for 25 million people. The contract threatened Emergent's very existence. The old vaccine, its only moneymaker, would likely be obsolete if VaxGen succeeded."

"Emergent responded by mobilizing more than 50 lobbyists, including former aides to Vice President Dick Cheney, to make the case that relying on the new vaccine was a gamble and that the nation's safety depended on buying more of Emergent's product."

"The company and its allies in Congress ridiculed VaxGen and impugned the competence or motives of officials who supported the new vaccine. The lobbying effort damaged VaxGen's credibility with members of Congress and the Bush administration, a Los Angeles Times investigation found."