Bargain Rack

John Quiggin puts JP Morgan's purchase of Bear Stearns in context:

It’s just been announced that JP Morgan will buy Bear Stearns for $2 a share, implying a value of about $250 million. Given that the company headquarters is said to be worth about $1.2 billion, that gives the BS banking business a value of negative $1 billion. And that’s only after the Fed agreed to take on $30 billion worth of toxic waste from the BS portfolio, politely described as “less-liquid assets.”

That's quite the bargain, though of course one needs to wonder if the headquarters building at 383 Madison Avenue could really sell for $1.2 billion in the current real estate market. According to The Wall Street Journal about a third of BS is owned by its employees, at least some of whom have presumably seen a very healthy chunk of their savings wiped out as BS shares declined from $170 in January '07 to $2 today. Looks like they probably won't be the last big firm to go under in this mess.

Comments

Holy shit.

The ramifications of this are mind boggling.

Posted by Brautigan | March 16, 2008 10:54 PM

It's been a wild day at Calculated Risk and The Big Picture. Take a looksie at the comments while you're there!

We're looking at a dollar crash and a market crash in one day!

Posted by Greg | March 16, 2008 11:01 PM

Actually, the price drop from $170 in January 07 seems much less striking than the drop from $60 on Thursday.

Interesting how the fifth largest investment bank on Wall Street lost approximately 97% of its market value in approximately ONE full regular business day.

Anyone want to take bets on whether tomorrow morning sees a "decline" in the stock price of various other investments banks and financial institutions?

Sometimes things eventually unfold just the way lots of smart people have been predicting for quite some time...

Posted by RKU | March 16, 2008 11:06 PM

Matt,

I was going to suggest that you use "BSC", Bear's stock symbol, as an abbreviation instead of "BS", but I guess "BS" may be more appropriate at this point.

Two points:

1) I wouldn't jump to the conclusion that Bear's mortgage paper was all "toxic". The market for even the best MBS has frozen. That's why even a high-quality lender such as Thornburg is at risk of going under, because, like most of them, it's reliant on the frozen securitization market.

2) If you think things are exciting at the left 'o center econoblogs, check out BSC's Yahoo Message board. Some of you will enjoy a dash of schadenfreude reading the lamentations of wiped out shareholders there.

Posted by Fred | March 16, 2008 11:11 PM

about a third of BS is owned by its employees, at least some of whom have presumably seen a very healthy chunk of their savings wiped out

Matt, earlier today:

I don't necessarily have a problem with the government intervening to bail a bunch of rich guys out when their own bad decisions blow up in their faces if that's what's needed for the health of the overall economy, but this sort of thing is one of several reasons why I think the very rich should pay high tax rates and we shouldn't be happy about the prospect of ever-growing inequality. At a certain level, the game is rigged and you're not really bearing any risk.

How can the fact that Bear Stearns employees (who are largely investment bankers, i.e. people you and I would describe as "rich guys") collectively lost ~$2.5B in the last three days possibly square with your contention that they're "not really bearing any risk"?

Posted by right | March 16, 2008 11:13 PM

$170 to $2? That's horrible

Posted by socctty | March 16, 2008 11:16 PM

I'd like to read some analysis of the fiscal impact of these fed bailouts. Perhaps they're necessary, but where is this money coming from, and what's the impact. They're dropping tens of billions of dollars on sectors at the drop of a hat.

Posted by Colatina | March 16, 2008 11:37 PM

How can the fact that Bear Stearns employees (who are largely investment bankers, i.e. people you and I would describe as "rich guys") collectively lost ~$2.5B in the last three days possibly square with your contention that they're "not really bearing any risk"?

Are you implying that they're facing the brunt of the losses in this whole debacle? It's not as if their salaries are pegged to future performance, but rather to the ephemeral gains that fostered this whole mess. BCS lost that amount, and the effects of this meltdown aren't commensurate with those faced by its harbingers.

Posted by EpicureanQuaker | March 16, 2008 11:42 PM

Let's see how many BSC insiders filed SEC Form 4 for sales over the past six months.

Ooh, look: $706 bought, $49,259,901 sold, cashed out at year's end.

Posted by pseudonymous in nc | March 17, 2008 12:16 AM

I'm wondering if the shareholders might rather take their chances in Chapter 11.

Posted by Al | March 17, 2008 12:24 AM

Al, it just shows how desperate times require desperate remedies: that was one of my very first thoughts, that the shareholders might prefer chapter 11. i don't believe this has ever happened before on a non-sports matter.

i noted on friday/saturday, when this matter came up here, that it was hard to believe that due diligence about selling could be completed in a weekend, but obviously the fed leaned heavily, and a shareholder's lawsuit may well be in the offing.

I should note to Matthew that the source of the line about Bear Stearns' headquarters was barry ritholtz of the big picture originally; i should also agree that i doubt the building could command 1.2B in today's commercial real estate market.

but back to the larger context: i have no doubt that bernanke is doing his best to apply the lessons of his historical study, but he's applying them so fast that i'm not sure that he isn't merely feeding a perception that if the fed is this panicked, then ye gods, maybe panic is the rational response.

Posted by howard | March 17, 2008 12:32 AM

noted on friday/saturday, when this matter came up here, that it was hard to believe that due diligence about selling could be completed in a weekend

I was thinking the same thing. Presumably on the financial side they had a preexisting relationship and did some diligence in connection with the $30B Fed bailout last week. But given everything, they're buying a pig in a poke. On the legal side, there's not much to look at, I'd imagine - just the publicly filed documents. Back when I was a lowly associate, I worked on a $10B merger of two public companies that came together in a matter of a couple weeks. But still I'd hate to be a Simpson Thatcher (or was it Davis Polk?) associate this weekend.

Posted by Al | March 17, 2008 12:55 AM

"Are you implying that they're facing the brunt of the losses in this whole debacle?"

How could they be? The Bear employee/shareholders are only going to loose most of their money and their jobs; the real victims here are liberal blog commenters who are going to lose... nothing.

Posted by Juan | March 17, 2008 1:07 AM

I'm wondering if the shareholders might rather take their chances in Chapter 11.

Apparently out of the question thanks to changes in the bankruptcy code w/r/t derivatives. (WSJ, cited here.) There's no stay on creditors acting to reclaim their assets.

It may turn out that the bill which came under such fire for making it harder for individuals to declare bankruptcy bites big corporations on the behind. It's already set up a situation where people will mail in the keys to their homes when there's no equity, in order to pay off credit cards rather than the mortgage.

Posted by pseudonymous in nc | March 17, 2008 1:08 AM

pseudonymous in nc, that's very interesting that there's yet another perverse aspect to the bankruptcy bill.

Al, presumably JP Morgan is being indemnified, in effect, by the Fed; i'm more thinking that the shareholders might wonder whether there wasn't some other recourse than $2/share (such as chopping up the pieces of the business, as the wsj discussed on friday), but if bankruptcy was off the table, maybe there was no choice, and bear would have failed to continue as a going concern by monday morning if it didn't move right now.

Posted by howard | March 17, 2008 1:15 AM

JP Morgan isn't buying Bear Stearns. The Fed is buying Bear Stearns. JP Morgan is just a proxy. The Fed is doing this to manage the disclosure and unwinding of counter-party risk and prevent raiders from loading up on credit default swaps and using whisper campaigns to bring down some of the other walking wounded investment banks.

This is what seemed to make the most sense to me after reading the longest thread ever at Calculated Risk. It's almost as long as a Tanta post!

Posted by wetzel | March 17, 2008 1:16 AM

Heck the HQ may not command 1.2 billion, but the bare land and scrap steel by itself has got to be more than the 240 million or so asking price.

Posted by Kolohe | March 17, 2008 1:23 AM

Interesting catch, pseudonymous. I assume they are talking about the provision that permits counterparties to derivatives to net postions without the automatic stay and without going through a judge. I wonder what the effect on BSC is. I vaguely recall that the bankruptcy bill did NOT include a similar provision with respect to the assets in an asset-backed securitization (even though the industry was pushing for that).

Howard, I see - you are looking at it from the other side. I bet there are a few other banks out there saying "hey, wait a minute, I might have wanted to bid for that". But, yes, I suppose if it looked bleak to even get through Monday, there may not have been time to try to sell to a higher bidder. As far as the Fed indemnifying JPM - that's unclear to me. Is JPM assuming liabilities in excess of what the Fed agreed to deal with last week? Dunno.

Posted by Al | March 17, 2008 1:53 AM

Seeing as how congestion pricing is one of your hobbyhorses, I would be interested in hearing your impressions on this article:

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/16/AR2008031603085.html

Posted by Anonymous | March 17, 2008 2:06 AM

Is JPM assuming liabilities in excess of what the Fed agreed to deal with last week?

Based on its own press release, no. It is however counting on that 30 billion indemnification to make it worth its while. If at least half of BSC mortgage debt is recoverable, JPM breaks even right away and gets a billion a year bump. If they have to repay that 30 billion, though, it soaks up any money they might recover from the outstanding mortgages.

Posted by Kolohe | March 17, 2008 2:08 AM

Damn, I misread what you wrote. I thought you meant was their indemnification raised above the 30 billion. The answer to your question is yes, they are assuming additional liabilities on top of the fed vehicle. The press release says they are netting about $13 billion more in exposure on the mortgage side ($33 billion total minus $20 billion from the fed vehicle) plus an undisclosed amount in other areas - offset entirely by the remaining $10 billion, I presume, because they don't discuss it all when talking about the cost/ benefits of the deal. They do discuss, for instance, that they estimate it will cost about 6 billion to buy everyone at BSC out that they need to, consolidate the businesses, and settle the lawsuits.

Posted by Kolohe | March 17, 2008 2:24 AM

Colatina

The U.S. taxpayers are funding the federal bailout.

The reasons for JPM and the Government stepping in were summarized by Wetzel.

Posted by EWard | March 17, 2008 2:52 AM

JP Morgan isn't buying Bear Stearns. The Fed is buying Bear Stearns.

Not in the way that the UK Treasury bought Northern Rock. You can argue that there's a tacit defence of investments here, but tacit may not be enough if LEH or some other houses take a swandive.

(Most of the December insider trades were the exercising of options, that were then sold at ~$90 a share. Nice work, boys and girls. Admittedly, it does look like a mandated exercise, mindful of tax liabilities, but the pattern has been to exercise in December and late March, and they never made it to March 21 this year.)

Posted by pseudonymous in nc | March 17, 2008 3:07 AM

"Let's see how many BSC insiders filed SEC Form 4 for sales over the past six months.

Ooh, look: $706 bought, $49,259,901 sold, cashed out at year's end."

Here is some context, from Nasdaq's insider buying link, since it also shows total stock owned. So, for example, after the execrable BSC chairman Jimmy Cayne exercised options and "cashed out" 172,621 shares last December, he still had 5,612,922 shares left. In other words, Bear's ultimate insider, its chairman, sold about 3% of his equity stake in BSC in December, and appears to have gotten all-but-wiped out on the other 97%, which has gone from a value of $100 to $2 per share since then.

That (and Cayne obliviously spending this past Thursday and Friday at a bridge tournament in Detroit) suggests that BSC insider sales weren't motivated by secret knowledge of the company's impending collapse.

Posted by Fred | March 17, 2008 4:01 AM

OK. Someone please explain to me why this doesn't mean the sky is falling, and we are not all doomed to suffer as the land is held in the vice-like grip of the second Great Depression.

It's not, right?

Right?

Posted by Anthony Damiani | March 17, 2008 4:40 AM

Yeah, but hey, let's all agree that Ron Paul is an idiot. I mean, it's not like he's been all but predicting this moment for a decade or anything. What a putz, with his "gold standard" and his doom and gloom worrying. What a sucker that guy is.

When the dollar becomes worthless while the fed keeps pumping out greenbacks one after the other in a fruitless attempt to delay the inevitable, let's all try and remember that the Paul is an idiot. Because that's the important thing.

Posted by Derek Sutton | March 17, 2008 8:17 AM

I feel sorry whenever people lose their jobs. However, it is idiotic to ever have more than 5% of your net worth or retirement savings in company stock. These were financial professionals who should have known better. People that should know that before Enron and Worldcom. Everyone should know that now.

Posted by Patrick | March 17, 2008 8:36 AM

Hey guys, out here on the Great Plains I'm a bit slow to catch up on the financial news. But is this related at all? I see a huge cloud of dust gathering on my western horizon, and all morning families have been streaming by in dust-smeared sport utility vehicles, with their worldly belongings strapped to the top.

Posted by . . . Is Fear Itself | March 17, 2008 8:37 AM

Fred, Fred, Fred-- lost in this is that there's only one question that matters. It's not, "are BSC shareholders going to sufficiently suffer", and it's not "who exercised their stock options when", it's "is the fed going to get its loan repaid?"

The equity owners are now screwed, no doubt about that. But this could end up just being a bailout for BSC's creditors if it turns out that they get first dibs on having their loans repaid before the fed does.

Posted by Tyro | March 17, 2008 8:41 AM

But this could end up just being a bailout for BSC's creditors if it turns out that they get first dibs on having their loans repaid before the fed does.

That's exactly what this is, and of course they get first dibs: that's the entire point of the Fed loan. The reason for this is to prevent a domino effect of Bear Stearns defaulting on all its debt obligations causing all other banks to fail, due to having to write down everything they are owed by BSC.

Unless the entire financial system collapses, the Fed will get its money back. (Technically, I don't think the Fed is actually putting up any cash at all; it's just providing a guaranteed backstop.)

Posted by right | March 17, 2008 9:03 AM

1) In Saturday's "Feldstein-Severe Recession Ahead", I noted that the collateral the Fed was receiving from Bear Stearns in exchange for its loan was dreck.

2) Later, JonF took issue with that description:
"The collateral details were not disclosed so to you are jumping to conclusions about it. Moreover by law the collateral must be of high quality-- it can't be "dreck". It will also have received a "haircut" a discount designed to protect against a future decline in value. Sould Bernanke or his collegaues have flouted these requirements they would be lawbreakers with very severe consequences to their own persons. My guess is they hewed to the law and demanded sound collateral."
Ref: http://matthewyglesias.theatlantic.com/archives/2008/03/feldstein_severe_recession_loo.php#comment-1539390

3) HOWEVER, this WSJ article describes the deal:
"To help facilitate the deal, the Federal Reserve is taking the extraordinary step of providing as much as $30 billion in financing for Bear Stearns's less-liquid assets, such as mortgage securities that the firm has been unable to sell, in what is believed to be the largest Fed advance on record to a single company. Fed officials wouldn't describe the exact financing terms or assets involved. But if those assets decline in value, the Fed would bear any loss, not J.P. Morgan."
Ref: http://online.wsj.com/article/SB120569598608739825.html

4) That Bear collateral sure sounds like dreck to me.

Posted by Don Williams | March 17, 2008 9:51 AM

1) On Friday, in the "Romance of Empire" thread, I noted:
"Word from London is that another US Bank is headed down the toilet:"
2) To which comment Tyro replied:
"Don, have you thought of getting your own blog, rather than posting spam on some else's comment threads?"
3) Alas, I persisted in casting pearls before swine, replying:
"So, is anyone shorting the Bush Empire? Anyone loaded up on Lehman puts?" 5:36 PM

Ref: http://matthewyglesias.theatlantic.com/archives/2008/03/the_romance_of_empire.php#comment-1529926

3) Lehman opened this morning down about 35 percent.

hee hee hee. Read 'em and weep, Rubes.

Posted by Don Williams | March 17, 2008 10:06 AM

I'd like to read some analysis of the fiscal impact of these fed bailouts. Perhaps they're necessary, but where is this money coming from, and what's the impact. They're dropping tens of billions of dollars on sectors at the drop of a hat.

At the end of the day, the money comes from printing. The Fed prints more money - sells T-Bills on the market to raise the cash - that it turns around and lends to Bear Stears/JP Morgan to guarantee the bad debt.

This inflates the currency - putting more $ in circulation than was in circulation on Friday - making the nominal price of everything increase. That means for those of us who didn't get a magical deposit of additional dollars this morning, our buying power has decreased.

Posted by Joe Strummer | March 17, 2008 10:09 AM

Re Joe Strummer's comment "That means for those of us who didn't get a magical deposit of additional dollars this morning, our buying power has decreased."
----------------
Oh, it can get a LOT worse than that. Ask the Argentinians what happens when the world decides your currency is dreck.

Or google "Capital Flight".

As i noted earlier, London newspapers are reporting what the US news media is trying to hush up:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/17/ccview117.xml

"As feared, foreign bond holders have begun to exercise a collective vote of no confidence in the devaluation policies of the US government. The Federal Reserve faces a potential veto of its rescue measures."

Posted by Don Williams | March 17, 2008 10:16 AM

Another "scare story" for JonF,

Re Lehman's:
"SINGAPORE (AP) -- Shares of Lehman Brothers Holdings Inc. plunged in Monday after a news report that Southeast Asia's largest bank instructed traders in an e-mail not to do business with the bank.

DBS Group Holdings Ltd. took back those instructions, but after the fall of the once storied Wall Street bank Bear Stearns on Sunday, skittish investors sold off quickly and Lehman fell 23 percent, or $9.16, to $30.10.

DBS sent an e-mail to several traders instructing them not to conduct any new dealings with Lehman Brothers or Bear Stearns Cos., two people familiar with the situation said, according to Dow Jones.

"There was an email sent out after the first advising traders to review new transactions (with Lehman Brothers) case by case," Dow Jones Newswires reported.

DBS wouldn't immediately confirm the existence of the e-mails.

"There are still transactions with Lehman that went through today," a top DBS spokesman told The Associated Press. "Given the current market conditions, we are merely exercising more vigilance and reviewing all new transactions on a case-by-case basis."
Ref: http://biz.yahoo.com/ap/080317/singapore_dbs_lehman.html?.v=5

Posted by Don Williams | March 17, 2008 10:24 AM

At the risk of sounding like a certain preacher in the news these days, God D*** Republicans.

Posted by El Cid | March 17, 2008 10:38 AM

By the way -- is Bernanke or Paulson doing a heckuva job yet?

Posted by El Cid | March 17, 2008 11:08 AM

The Bear Stearns building may be worth $1.2 billion but I would venture that BS has fully borrowed against the building and has no equity in it.

Posted by Martin | March 17, 2008 11:08 AM

As Martin implies, looking at the value of one asset tells you exactly nothing about the overall value of the company. You must look at the complete balance sheet-both assets and liabilities-and under GAAP even that can lead to specious numbers. (Their last published numbers gave them a book value of about $80 a share). I suspect that many of their assets have declined in value and that they have significant off-balance sheet liabilities and counter-party risk.

Posted by Mark | March 17, 2008 11:23 AM

As Martin implies, looking at the value of one asset tells you exactly nothing about the overall value of the company. You must look at the complete balance sheet-both assets and liabilities-and under GAAP even that can lead to specious numbers. (Their last published numbers gave them a book value of about $80 a share). I suspect that many of their assets have declined in value and that they have significant off-balance sheet liabilities and counter-party risk.

Posted by Mark | March 17, 2008 11:24 AM

Tyro,

""is the fed going to get its loan repaid?"

If it doesn't, it may still eventually turn a profit on the collateral from Bear. As JonF said, it depends on terms and the discount applied. Assuming the Fed insisted on a discount to face on the AAA-rated securities, since it has the luxury of holding the securities until the market stabilizes, it could eventually sell them for more than it loaned to JPM.

Don Williams,

"3) HOWEVER, this WSJ article describes the deal..."

That WSJ article says nothing that contradicts what JonF wrote, and it says nothing to support your contention that the collateral was "dreck".

"Oh, it can get a LOT worse than that. Ask the Argentinians what happens when the world decides your currency is dreck."

Well, if you default on your sovereign debt to the rest of the world, like Argentina did at the beginning of this decade, that, and a precipitous drop in your currency can lead to the sort of hard times Argentinians experienced during their financial crisis. But having a weaker (though stable) currency isn't necessarily a bad thing. Ask the Argentinians. Or read this profile of Buenos Aires in yesterday's NY Times, "Argentine Nights".

The Argentine peso went from a 1-to-1 peg to the U.S. dollar before the crisis to its current exchange rate of about 3.1 to the dollar. The result? A flood of European and American artists and entrepreneurs has settled in Buenos Aires, reinvigorating it (maybe the same thing will happen to Matt's neighborhood of D.C., if the dollar gradually loses another 50% against major foreign currencies?). More broadly, Argentina's weaker currency has slowed imports, spurred exports, and spurred tourism, and has led to 8% annual growth since the financial crisis. That doesn't mean that the Peronist government of the Kirchners hasn't enacted some stupid policies (e.g., energy price controls that have led to shortages during the antipodal winters), but a weaker currency has been a boon for the country.

Posted by Fred | March 17, 2008 12:04 PM

Fred probably just likes to tango.

Posted by Steve S. | March 17, 2008 12:32 PM

1) To see just how full of shit Fred is, read this account of life in Argentina after their currency crisis:
http://www.frugalsquirrels.com/cgi-bin/ubb/ultimatebb.cgi?ubb=get_topic;f=1;t=044387;p=1

Note that the writer FerFal was from an upper middle class family in Buenos Aires. So life for many people was even worse than what he experienced.

An excerpt:

"The third pyramid showed the communist society. Where arrows from the low and middle class tried to reach the top but they bounced off the line. A small high society and one big low society, cushioned by a minimal middle class section of pyramid. Then we turned the page and saw the darned fourth pyramid. This one had arrows from the middle class dropping to the low, poor class.

“What is this?” Some of us asked.

The teacher looked at us. “This is us”

“It’s the collapsed country, a country that turns into 3rd world country like in pyramid five where there is almost no middle class to speak, one huge low, poor class , and a very small, very rich, top class.”

“What are those arrows that go from the middle to the bottom of the pyramid?” Someone asked.

You could hear a pin drop. “That is middle class turning into poor”.

I won’t lie, no one cried, though people rubbed their faces, held their heads and their breath.

No one cried, but we all knew at that very moment that all we thought, all we took for granted, simply was not going to happen.

“You see, the income from the middle class is not enough to function as middle class any more. Some from the top class fall to middle class, but the vast majority of the middle class turns into poor” Said the teacher.

I don’t know how many people in that room suddenly understood that he/she was poor.

The teacher continued “You see, we have a middle class that suddenly turns to poor, creating a society of basically poor people, there is no more middle class to cushion tensions any more. Middle class suddenly discovers that they are overqualified for the jobs they can find and have to settle for anything they can obtain, there for unemployment sky rockets, too much to offer, too little demand. You see they prepare, study for a job they are not going to get. You kids, you are studying Architecture because you simply wish to do so. Only 3 or 4 percent of you will actually find a job related to architecture.”

Posted by Don Williams | March 17, 2008 12:48 PM

Don Williams,

"To see just how full of shit Fred is"

If I am so full of shit, then tell me what you dispute about my previous post, and why you dispute it. I understand that this would require you be honest, think critically, and argue coherently, and none of that has part of your shtick so far, but maybe you can start now.

Posted by Fred | March 17, 2008 12:56 PM

Some more excerpts re life in Argentina after the 2001 currency crisis:

------------
"Even though crime has always been an issue in South America, my country was quite the exception. It was dangerous, yes but nothing like after the 2001 economical crisis. One used to be able to let kids play on the sidewalk, or walk back home from a party, a few blocks, and be somewhat safe. This all changed now. There are no kids playing on the sidewalks anymore. I should emphasize this a little more. There are absolutely NO kids playing on the sidewalks at all, at any time of the day. Maybe a kid rides his bike a few meters on the sidewalk, but always under the supervision of an adult. A kid riding a bike on his own will get that bike stolen in no time, probably get hurt in the process, therefore no responsible parent leaves a kid alone on the street. Teenagers present a greater problem. You can’t keep a 15 or 16 year old inside a house all day long, and even though they are big enough to go out on their own, when the sun goes down things get much worse.

This is when parents organize themselves; either taking them to someone’s house or to a club and picking them up at a certain time. Taxis and remises are used sometimes , but there have been lots of cases of girls getting raped, so no parent worth a buck leaves his son or daughter in hands of a stranger. After years of living like this, almost everyone learned to be careful; sometimes they had to learn the hard way. Practically no one leaves a door or window opened or unlocked. Nor do they hang out in front of the house talking to friends. A bad guy might just see you there, like a sitting duck, pull a gun on you and take you inside your house."
--------------
"On the car/driving issue, that calls for an entire post dedicated to SHTF driving. For now I’ll just say that windows and doors have to be closed at all times, a weapon must be within arms reach, and that stop signs and traffic lights have a hole new meaning once TSHTF. If your country ever falls as mine did, you’ll remember me whenever you see a traffic light. You never stop at a red lights or stop sign unless there is traffic, especially at night.

At first, police would write you a ticket for not stopping at a red light if they saw you (another way of saying that they will ask for a bribe if they see you pass a red light), but after a few months they realized that nothing could be done, people would rather risk a ticket than risking their lives, so they decided to turn traffic lights to permanent yellow at night, after 8 or 9 PM. "
-------------
"The theory behind kidnapping is simple to explain, yet it evolved into a complicated issue that presents itself in several forms and the survivalist should understand to better defend his family and himself. The way kidnapping just popped out of nowhere it astonishing to say the least. One day kidnapping for money is almost unheard of, and within a couple of months, after the economical collapse, everyone starts getting kidnapped. The news report of about 3 or 5, sometimes even 10 kidnaps in one day in Buenos Aires city. "
-----------------
"Again, I can pin point the exact moment when the entire country realized what was happening. After the 2001 crisis things had been bad, but people in Buenos Aires, the capital city and the richest province, didn’t realize how bad things actually where in the other provinces. This was until teachers noted that kids had problems with education. You see, they noticed that they had problems to concentrate, that they fell asleep, and that they found it difficult to resolve mathematical equations.
They later found out that this was due to malnutrition, kids where not receiving the minimum amount of nutrients for a healthy working body. The braking point was when a reporter interviewed a little girl about 8 or 9 years old. The reporter lady asked her what she wanted to be when she grew up, the usual kiddy questions. The girl, crying, said that she didn’t want to be anything; that she didn’t care. The lady asked her why was she crying. She said that she cried because she was hungry, that she had nothing to eat for days, and it was then that I noticed how skinny the little girl actually was.
Seeing children starve is terrible, I guess we all saw those images of the starving kids in Africa. But when you see them speak your same language, with your same accent, in your own country, it hits a nerve."

Posted by Don Williams | March 17, 2008 1:04 PM

Why was the company bought out for $2 per share, but why are people still investing in them for $6 per share??

Posted by Erik | March 20, 2008 7:04 PM