Thursday, 18 September 2008

The monster hunts down the last two survivors.

The remaining two US investment banks are in trouble. Shares in Morgan Stanley fell 21 percent, while Goldman Sachs, the largest remaining independent investment bank declined 13 percent. Ominously, both banks are starting to follow the same ghastly trail of Bear Stearns, Merrill and Lehmans. First, the share price slides and then comes the kill.

It is like watching one of those teen horror movies. The five college kids are out in the wild. With excessive pride and hubris, they have provoked the monster from the deep, who is now coming to wreck her savage revenge. Three victims are already gone, suffering a hideous but ultimately justified demise. Now, only two are left in the cabin. They hear the slow heavy steps and low tortured growl from outside. She is coming, she is getting closer....there is no escape,.....she is coming.

Morgan Stanley seems to have a better understanding of its plight. It is trying to find a buyer. It is pursuing two strategies, a China Investment Corp. buyout and a merger with the troubled retail bank - Wachovia.

The first option is just grotesque. How much further can Wall street sink; running cap in hand to the Communists for bail-out. The second option would simply be a case of two drunken old men holding each other up. Sooner or later, both will crash to the ground.

Goldman seems frozen with fear. It doesn't know what to do. Maybe there isn't anything it can do. The beast has finally smashed down the door and Goldman is staring into the abyss from which there is no return.


Anonymous said...

It is possible that Goldman Sachs finds a nice bomb shelter to survive in during the onslaught, just to re-emerge after the fighting is over as the sole investment bank alive. What do you think?

Alice Cook said...

You mean it is like that old highlander movie - "there can be only one"

Anonymous said...

Oh my gosh, totally! Goldman is McCloud: "There can be only one"

Anonymous said...

"It is like watching one of those teen horror movies"

I'm sure Goldman's is now looking around the forest at night saying "come guys, I know you're out there. Quit kidding around!"

BTW, a big thing about Goldmans is that nearly 90% of stock is owned by current employees or past partners. That makes things pretty different.

I'm all for selling everything to the commies. Then have a public campaign for customers to take their business elsewhere. Perfect solution. The commies swallow 100% of the loss, banking returns to the West-owned businesses, and theres no default to ruin future investment.


dearieme said...

Who was the wag who said months ago that everything will end up owned by the Commies or the Terrorists?

Anonymous said...


I said it here, but I nicked it off someone else.


Anonymous said...

Goldman made a killing by shorting now-toxic mortgage securities, so they might do ok.

Or they might collapse like the rest, who knows.