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The economists and economic naval gazers at American Madness were blown away by the price JPMorgan paid for Bear Stearns this weekend. But we were more astonished at how the payment was made (with our money…yours and mine).
Well, at least the taxpayer got a good deal! Poor Jimmy Cayne walks away with about 1/100th of what his stock was worth just six months ago, and his billionaire friends have had big chunks ripped out of their wallets. Thousands will lose their jobs. It’s a sad story all around, except that it makes JPMorgan chief Jamie Dimon look like an absolute genius, all the more so because he’s managed to get the so-called financial supermarket idea to work for him, despite the failure of Chuck Prince to do the same at Citigroup (which makes great copy, since Dimon plays the role of Cordelia to Prince’s Goneril in the tale of their plutocratic father Sandy “Lear” Weill).
Many articles will say it better, but our two cents is that this bailout falls high in the moral hazard category. Some financial institutions should be allowed to fail. Some executives should have paid more attention to hedge fund blowups over the summer and less to the sporting life of cards and golf (or, for that matter, to writing movie reviews on their Myspace pages).
Is Lehman next?
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In the great tradition of the conquered, much as the French built the Maginot line to protect themselves from a World War I offensive, the U.S. Government has come out with suggestions for how we can best prepare for the last economic war.
“A mortgage broker would be required by law to act in the borrower’s best interest, not his or her own interest,” suggests Uncle Sam. The only problem with this suggestion is that it would create a fiduciary relationship between the Broker and the prospective Borrower. Such a relationship would be anathema to the mortgage industry. Read more »
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Thrasher Funds is a mutual fund management company that that is choosing a different marketing ploy to connect with its potential investors.
Rather then targeting your traditional investor, they are looking for the non-traditional (shocking, I know) younger investor. Folks from the Gen-X and Gen-Y groups who are weary of the typical stuffed shirts down on Wall Street and don’t necessarily think that the folks at MErril Lynch hold the same values that they do.
The GendeX™ Mutual Fund was developed and is managed by young adult investors for young adult investors. A group of more than 60 million Gen X and Y’ers largely untapped by the financial market place…until now.
The idea is to capture younger investors who are typically ignored by the power brokers on Wall Street by making them aware of the benefits of investing at a younger age as well as targeting them through their interests and the mutual fund investments.
Read more »
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I got an email this morning from an unfamiliar name asking me to please forgive the sender for so quickly sending a second email requesting funds for his charity.
In other words: two emails sent one after another by someone I don’t know asking me for money.
Have you ever noticed how people raising money think that their charity is the only one that matters (because it matters deeply to them) and that they are somehow doing you a favor by asking for your money (as if you don’t have any charitable causes of your own?).
Well, since I didn’t even know the guy, I asked politely how we were related. He responds: “I think you interviewed me for articles several times.” Well, that got me hot in the face. Was it true? If so, I’ve not interviewed him in at least two years (I checked my publication’s database). In the process, I remembered meeting him, at a hedge fund party back in May.
I’m pretty certain that it was the first time we’ve met. Even so, he got my business card, and so without even a “Hi, how are you” he just starts soliciting away.
This is no way to build relationships or ask for money. You’ve got to make people care about your causes, not simply bombard them with requests with no introduction. Relationships are built over time. When my friends in business ask for donations, I’m happy to do what I can.
Also note the pomposity of a highly compensated banker (in this case) asking a journalist to help him raise money. Just the same when these huge foundations boast of the millions their members donate. Don’t let them make you feel small. What little I can give each year is a larger percentage of my much smaller net worth.
When I find this guy’s card, it’s going in the circular file.