by Joe Shea
American Reporter Correspondent
March 17, 2008
THE SOUND OF WALL STREET FALLING - OR NOT
BRADENTON, March 17, 2008, 4:40AM ET - A few hours from now, the U.S. stock markets will open and a historic day will unfold.
As a tidal wave of commercial ruin seemingly bears down on many of them, the readers of the Wall Street Journal put aside their penchant for secrecy and howled like moonstruck coyotes overnight in a blog the Journal - itself now the property of Australian Rupert Murdoch - publishes on its busy Website, WSJ.com.
In their words you hear the sound of the triumphantly right and told-you-so's, the Monday morning quarterbacks, the angry, the skeptical and the sad, and also some of the tiny, desperate voices of people facing financial disaster. Some blame the government and politicians; some blame "crooks" on Wall Street; none blame themselves. There are useful links to more information, and self-serving links to lousy information.
Some of the posts are articulate, trenchant, pithy, witty and wise; some are dull, stupid, silly, illogical and tasteless; some bear a kernel of real wisdom, and many a failure to care deeply about the lives and hopes tht may fall with the markets today, if by the end of the day they do fall.
At 4:26AM ET as I write this update, American and other banks that trade on foreign markets are down on average by more than four percent; Citigroup, UBS, Deutsche Bank and many more are falling sharply, according to CNBC. Asian and European markets are crumbling. Dow Jones futures are down nearly $200. Strange-looking men are gesturing wildly and making ferocious arguments; I've got the sound turned off so as not to make my wife. The flashing numbers say it all by themselves. But in every major economic crisis, this is always how things look at 4AM; it may look very, very different by the close of the day. By then, the whole city will be drunk on green beer and ready to say to hell with it, anyway. It could even be a lucky day, for some.
The bloggers' comments are all in response to a post by Dennis Herman of the Journal's staff stating the plain and terrible facts about the buyout of Bear Stearns Cos. by JPMorgan Chase, an investment bank founded by the financier J. Pierpoint Morgan himself, who in 1909 averted a huge wave of panic selling by a generous act, tried to do so again in 1929, and has tried again on Sunday, when it agreed to buy Bear Stearns for $2 a share. The price represents a decline from $170 per share in January 2007, and from $30 this Past Friday, when it fell 47% to close at $30.
The purchase by JPMorgan Chase came only after an indemnified $30 billion loan to Morgan on Friday from the Federal Reserve was passed through its own coffers to Bear Stearns to keep the latter's obligations current and American markets liquid today.
We don't ordinarily quote the Journal or its blogs in The American Reporter, but on the premise that blog content, i.e., information, like Bear Stearns, ought to be free, or almost, we have gone ahead and quoted them at great length below in a one-time spirit of "fair use" that we hope will enlighten our readers, inflame the guilty and console the innocent - and not unduly irk the Journal, yo which we subscribe for %9 a month and which has not ptherwise taken notice of us since 1996.
Some might want financial advice today. I can offer this, on good information: "Commercials," the very biggest players in the financial game, have staked out the longest short position in history - i.e., they believe there is going to be a massive fall - on gold and oil futures. That said, while they are unlikely to be wrong, no one can tell you for sure when they will proved right. The last time this positioning happened on the present scale, the dot.com industry went bust.
Also, of the 40-odd stocks I monitor on a daily basis, ranging from tiny companies to the world's largest firms, only the 81,000 shares of ERHE I hold made money. It was thrilling to see that on a page of all those stocks Friday evening, only one was in blue, up $0.03, or 13.6 percent, to $0.25. I believe in the stock, but I warn you, it has many issues to face down the road.
And one final thing: About 200 years ago, in his essay "On Politics," Ralph Waldo Emerson wrote the words, "A penny is worth a bushel of corn or other commodity." I pondered this innocent phrase for 40 years, and came to this conclusion: Now is the time, I believe, for the United States to back its currency with agricultural commodities, such as corn, as it once pegged the value of our dollar to gold. An odd thing will happen quickly: We remain the undisputed leading economic power on Earth, and remain so for another 200 years.
That's my advice. There is more below.
Tou will find after Mr. Herman's first post in italics, and then individual comments separated by the phrase "Comments by" in bold type. There are hundreds, if not thousands of them, so read on.
This is the sound of Wall Street falling - or not. We shall see.