Tuesday, February 2, 2010

Now that Bear Sterns has paid back its bailout, is this the time to split it up?

Bear Sterns has just repaid its $10 billion bailout plus interst, and it has posted a world's record quarterly profit.





Wouldn't this be the time for regulators to break it up into smaller companies, so it is no longer ';too big to fail?';





NO MORE bailouts.Now that Bear Sterns has paid back its bailout, is this the time to split it up?
That would be the wise thing to do, before they hold the entire economy hostage again and demand $10 trillion next time.





But that would be too much common sense for the Obama administration. It won't happen.





And a year from now, we'll be going through the same gyrations all over again.





Hint: how do you think a company goes from needing a bailout to posting a world's record quarterly profit in such a short time? Do you sense that this will be the next wave of ';We didn't know, give us a trillion please?';Now that Bear Sterns has paid back its bailout, is this the time to split it up?
Yes, that was actually Goldman Sachs, not Bear Sterns. Thanks to all the astute readers who didn't mention that.





JP Morgan has also paid back its bailout, so the same question would apply to the company that bought Bear Sterns.

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why? the fact that it repaid the bailout loan in such a short time means that it's a healthy company. In fact, we need more of those.
Just to be clear: Bear Stearns collapsed in March 2008 and was bought by JP Morgan Chase. Bear Stearns does not even exist anymore!

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