BEAR STEARNS

 THE WORST IS YET TO COME !!!

In a previous post, I mentioned the danger currently underlying in the US financial system. But I might have underestimated how soon a crash could happen. Well, Bear Stearns just narrowly avoided a terrible collapse thanks to a double action by the Federal Reserve and JP Morgan bank. Although this short term action will keep a curtain on the deep failure brought on by the Subprime effect, we haven’t hit the bottom yet. More defaults, foreclosures are going to hit the US economy with disastrous effect on the World Financial system.

Let’s not forget how INTERCONNECTED all financial institutions are all over the World (globalization again). This same interconnection was one of the reason why the Gov’t intervened. Bernanke said allowing Bear Stearnsto fall completely (which technically happened) would have been disastrous.

Time will tell if the Banking system is now safe…. (seriously doubt it!)

AN

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