Stock Ideas 
Stock Ideas Investors Daily Edge Why Bear Sterns ! and Not Me
Stock Ideas Investors Daily Edge Why Bear Sterns ! and Not Me 
Market Watch
|
By Rick Pendergraft Tomorrow morning we’ll find out what the Fed discussed at last month’s meeting and why they chose to cut both the Fed funds rate and the discount rate. The minutes from that meeting will be released at 2:00 pm tomorrow afternoon. |
|
| More... |
Most Popular
Login Form
| Why Bear Sterns ! and Not Me |
| Friday, 11 April 2008 | ||||||||
|
I received numerous emails this week about my Monday article and my take on the JPM/BSC/FOMC merger. Several of the emails called me out in calling it a bailout and pointed out how the Bear Stearns employees that were losing so much. Hey, I feel sorry for these people. But I also feel sorry for those thousands of businesses that go under each and every week in this country. But because they are small companies, the Fed and the White House don’t come to their rescue. Because it is a Fortune 500 company, the Fed nor the present administration want to say that Bear Stearns went under on their watch. The same thing happened with Chrysler during the Carter administration. It is all about saving face. My question is, if Early To Rise were to go under, would the Fed come bail us out? I assure you the answer is no. If my wife’s company were going under, would the Fed bail them out? Again the answer is no. Why? Because ETR only employees about 25-30 people. My wife’s company is even smaller. I don’t have the stats on this, but I am willing to bet that more people lose their job because the company they worked for went out of business in one week, than the number that would have lost their job had Bear Stearns gone under. But because the local mom and pop business doesn’t generate national headlines when it goes under, the Fed doesn’t help keep these businesses afloat. So, if I work for a large multinational corporation rather than a small company, I am entitled to government intervention when the company falters due to poor management decisions? I don’t buy this argument. Like I said, I do have sympathy for those that have worked at Bear Stearns most of their lives and have now lost so much. But if those employees had all of their retirement invested in Bear Stearns stock, I have less sympathy for them. Come on, you work for an investment firm and I am sure the first thing the brokers there are taught in training is “don’t put all your eggs in one basket.” So far, I haven’t heard of any job losses at BSC. I am sure they are coming, but so far as I know, no one has lost their job yet at BSC. That’s not to say there won’t be job cuts down the road, and I am guessing they are coming soon. I did have one reader send a suggestion that I am hoping is tongue in cheek: If we start a Support a Broker program, will we get pictures and a personal note from the beneficiaries once a month? John M.
Interesting idea John, maybe we could get Sally Struthers to do our commercials for us. Good Luck and Good Trading, Rick P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
This investment news is brought to you by Investor's Daily Edge. Investor's Daily Edge is a free daily investment newsletter that is delivered by email before the market opens. It's published by Fourth Avenue Financial, a subsidiary of Early To Rise (an affiliate company of Agora Publishing). In each weekday issue you'll receive practical strategies for protecting your portfolio and multiplying your money. You'll also learn about undiscovered opportunities in emerging sectors and markets, deeply discounted stocks, recommendations for bonds, cash, commodity and real estate investing, and top ETFs. To view archives or subscribe, visit Investor's Daily Edge .
|
||||||||
| < Prev | Next > |
|---|
