Bear market

Bears may or may not shit in the woods but Bear Stearns certainly made a mess on the street. The collapse of the 5th largest investment bank in the country a few months after the demise of Northern Rock in the UK is horrifying but there is a silver lining. The consolation is that Bear Stearns collapsed under the weight of blinding stupidity rather than under the stress of a collapsing economy. The sub-prime issue is a miracle of lame thinking and a conspiracy of greed. The notion that a portfolio of dodgy loans would become less dodgy when wrapped in the sheen of the investment banker’s imprimateur was never less than ridiculous. The borrowers were dumb, the lenders reckless but the bankers were worst of all. They are businesses built on trust and reputation yet individuals at the most senior level played russian roulette with shareholder’s funds in the pursuit of another big bonus. Maybe some of them will hand a bonus back? Maybe they will waive future bonuses for a period of penance – 5 years perhaps? Maybe they will look at their share owners  as their bosses for once? Or maybe they won’t.

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