Yes, that headline is a quote from the wisdom of Billy Ray Valentine, former star of that once-great Philadelphia commodities brokerage, Duke and Duke. Sorry, but with me, analysis of financial matters doesn’t get much deeper than that. That quote popped into my head yesterday morning as I was observing, with my PDA brower set to the WSJ site, the reaction on Wall Street to the Bear Stearns bailout.
The latest word is that the crisis has been averted, or delayed, for what that’s worth.
I must confess that, since I get a bit confused just following what Winthorpe and Valentine did to the Dukes at the end of "Trading Places," I hardly know what to think about this supposedly Earth-shattering set of events surrounding Bear Stearns.
This is a barrier to my reading the news stories about it. As an editorial page editor, I read with the constant question in my mind, "What do I think about this?" I read any news story skimming past most of the who, what, where and blow-by-blow stuff, looking for answers to specific questions that will help me come to a conclusion.
But I don’t find answers even to the preliminary questions that occur to me regarding the buyout of Bear Stearns, such as, "When people go to work in the morning at Bear Stearns, what do they do?"
I do get a little more sophisticated than that. I also ask, "Why did the Fed deem it necessary to prod J.P. Morgan Chase to buy out Bear Stearns?" And wasn’t there something really unseemly about the government helping one financial firm buy out another at $2 a share? (I am reminded disturbingly, and almost certainly irrelevantly, of the case I read about recently regarding the Manhattan Elevated Railway, which Jay Gould bought at a fire sale price in 1881 after a judge had helped run down the value of the stock — young Theodore Roosevelt built his early legislative career largely on the basis of fighting such deals.)
What would have been the awful thing that would have happened had the bailout (or purchasing at a ridiculously low price — which seems to me like a really, really different thing from a bailout) not occurred? And why did the markets panic so AFTER it occurred? Was it because having the Fed invest $30 billion on behalf of you and me? Should I be freaked out, too? Should I be pleased or ticked off that the nation’s central banker exposed itself like that for the sake of one company?
What does this mean to us average Joes? Are we going to be more or less likely to buy our little boys the G.I Joe with the kung fu grip? And will anything ever happen on Wall Street that will get me that 52-inch HD TV with 1080 resolution? Let’s get real here, people.
But the people who allegedly know the answers to these compelling questions just drone on and on in a language of their own…