Posted by: Armel | March 17, 2008


                   bear-sterns-b-ding.jpg   BEAR STEARNS


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!)

Armel Njeunou




  1. […] After all the hype about what to expect, the results just proved to be as illogical as the publication of the report on starting such a process. If the intent was to test the viability of F.I in the face of pressure from shareholders and short sellers, it means that the process couldn’t possibly be legitimate since the last thing the regulators wanted was to contribute to another Bear Stearns. […]

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