Mailbag; OpEd: "Bear Trader" Writes; On Friday Markets
(Ed.note: The following is an email from last week. It is not intended as investment advice.)
"The Fed has put $1 Trillion into the money center banks and it hasn't been enough to keep them afloat. Bear Stearns went down 47% Friday. The torrent of cash has functionally nationalized the 31 primary dealers, the biggest investment banks. No end in sight. Clinton getting rid of Glass-Steagall and the Greenspan Fed has caused disaster. Barney Frank is pushing for a bill to allow the Big Boys to lie on their balance sheets. The Fed bought $200 Billion of absolute garbage CDOs at full face value last week (there is a fig leaf that these are repos, as if they won't be rolled over "for as long as it takes") and still that is not nearly enough. The Fed has spent over half of it's assets on this so far and their spending has only increased in speed. The Fed will likely have to be recapitalized by summer. "
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