It’s hard to restrain oneself from chuckling with glee at the ci devant masters of the universe at Bear Stearns as they contemplate their fortunes turned to dust in the twinkling of an eye. Surely the ghost of J. P. Morgan is heaving his paunch and laughing heartily somewhere, up there? down below? Still, at the banking firm of Bear Stearns – should we just call it BS? – where the culture was to buy the stock of the padrone, quite a few of very ordinary folks will go down with the ship. Secretaries, mail-room workers, lower level admin and research staff, etc. In terms of percent of the people affected, they will be the majority, and they are royally screwed.
In a crisis, they say, you see what people are made of, and so too, a system. Without trust, there can be no business, and trust is dwindling a bit these days. “Come to think of it, just how were those people making all that money?” Why, when you examine the entire business, it does seem a little like a shell game, a Ponzi scheme, don’t it?
It’s all fine as long as the stock is going up. If you aren’t getting rich, it’s your fault, your genes, your backbone, your sorry moral state. The elect and the masters are chosen by The Market, and the words of the Lord are written in the annual reports (doctored, it’s true, but every deity needs an interpretor, a prophet). Now, once again, we hear the words of Captain Renault from the film, Casablanca: “I’m shocked, shocked to find that gambling is going on in here!”
Oh well, damn the torpedoes, full speed ahead and socialize the risk, privatize the profits! See the recent NY Times editorial on this that sums it up well.
“In this room are people who have built this firm and lost a lot, our fortunes,” one Bear executive said to Mr. Dimon with anger in his voice. “What will you do to make us whole?”
Why the hell should anyone care about making this troglodyte “whole?”