As you may have heard, venerable investment house Bear Stearns is no more. Hopefully, the government-arranged buyout by JP Morgan will prevent any further damage to our slowly downward-swirling economy.
Ha! That's what they want you to think, so you calmly go about your business and don't mess up the economy anymore. To put this in some sort of perspective: James Cayne, the erstwhile CEO, received 13.4 million for his stock. This time last year, that same stock was worth 1.2 billion. That's more than a billion dollars, gone, from just one person. Bear Stearns has 14,000 employees, many of whom will probably get laid off. There are horrified articles when an auto company contemplates laying off 1,000 workers. All we're saying is, this is not a good sign for our faltering economic situation.
Maybe the current crisis isn't causing panic because so far, it's perceived that most of the people affected are fat cat investment bankers (the people who have been losing their houses are also mostly ignored, but that's another story). We hate to be alarmist, but we'll just say that they didn't know the Depression was starting on Black Tuesday, either. We're taking all our savings and buying gold bars and keeping them under our bed. If we all run on the bank, we'll have real problems, so the rest of you just try to ride it out.
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