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Pied Piper’s Papa from Pakistan

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Peace is NOT coming to our financial world as well…

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The unraveling of Bear Stearns is a shock, we all agree. If the Chairman of the US Fed Reserve, Ben Bernanke, is to be believed, it was a situation that if left to its doings could have broken the bones of American economy and those of all the economies of the world. Timely and thankfully, the Fed came to our rescue at the last minute, and facilitated a hotchpotch of a deal to enable JP Morgan Chase take over the sinking ship. In the process, the Fed had to foot a bill for US $ 30 billion in return for assets whose real worth no one in the world yet knows. No one, imagine that in the backdrop of all our smooth talking laptop ticking oracles of the financial world who pretend to know the fair value of the entire universe to the nth.  

I am not much interested in the Bear Stearns saga, other than that I am now on the short side of the market, eagerly awaiting a local version of Bear Stearns to happen. Well, not a total collapse, but just a little drag down. Even a five rupee fall will be fine with me. 

What I am more interested in is to point out the blunt resemblance between Donald Rumsfeld of the Peace in Iraq fame, and Ben Bernanke and all those who accompanied him during his testimony to the Congressional Committee. He and his companions deserve the highest trophies in the Talk-to-Waste-Time category, for having munched meaningless hollow phrases for many hours over two days, without revealing a word that we didn’t already know. As the speakers talked on and on, they looked more and more like some meticulously prepared mini models of that greatest time-wasting-talker of our times, whose “coming soon” Iraq peace hasn’t turned the corner for years.  

And that tells me something else. Peace is not coming to the financial markets, just like peace has not landed in Iraq till this day, in spite of all the assurances of the all the phrase munching mouths of the world.  

I can bet all my money on it, and yours as well.

Written by baryaal

April 4, 2008 at 2:23 am