"Renaissance Thinking About the Issues of Our Day"
"On Tuesday, March 11th, 2008, somebody — nobody knows who — made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness — "like buying 1.7 million lottery tickets," according to one financial analyst.
But what's even crazier is that the bet paid.
At the close of business that afternoon, Bear Stearns was trading at $62.97. At that point, whoever made the gamble owned the right to sell huge bundles of Bear stock, at $30 and $25, on or before March 20th. In order for the bet to pay, Bear would have to fall harder and faster than any Wall Street brokerage in history.
The very next day, March 12th, Bear went into free fall. By the end of the week, the firm had lost virtually all of its cash and was clinging to promises of state aid; by the weekend, it was being knocked to its knees by the Fed and the Treasury, and forced at the barrel of a shotgun to sell itself to JPMorgan Chase (which had been given $29 billion in public money to marry its hunchbacked new bride) at the humiliating price of … $2 a share. Whoever bought those options on March 11th woke up on the morning of March 17th having made 159 times his money, or roughly $270 million. This trader was either the luckiest guy in the world, the smartest son of a bitch ever or…
Or what? That this was a brazen case of insider manipulation was so obvious that even Sen. Chris Dodd, chairman of the pillow-soft-touch Senate Banking Committee, couldn't help but remark on it a few weeks later, when questioning Christopher Cox, the then-chief of the Securities and Exchange Commission. "I would hope that you're looking at this," Dodd said. "This kind of spike must have triggered some sort of bells and whistles at the SEC. This goes beyond rumors." "
"When Matthew Hoh joined the Foreign Service early this year, he was exactly the kind of smart civil-military hybrid the administration was looking for to help expand its development efforts in Afghanistan.
A former Marine Corps captain with combat experience in Iraq, Hoh had also served in uniform at the Pentagon, and as a civilian in Iraq and at the State Department. By July, he was the senior U.S. civilian in Zabul province, a Taliban hotbed.
But last month, in a move that has sent ripples all the way to the White House, Hoh, 36, became the first U.S. official known to resign in protest over the Afghan war, which he had come to believe simply fueled the insurgency.
"I have lost understanding of and confidence in the strategic purposes of the United States' presence in Afghanistan," he wrote Sept. 10 in a four-page letter to the department's head of personnel. "I have doubts and reservations about our current strategy and planned future strategy, but my resignation is based not upon how we are pursuing this war, but why and to what end." "
"Japan's centre-left Prime Minister Yukio Hatoyama on Monday launched a broadside against the excesses of capitalism, in his first parliamentary address since taking office last month.
Speaking on his vision of a kinder, gentler society guided by the spirit of "fraternity," Hatoyama said market forces were useful for a country but must be tempered in order to create a livable society.
"It is self-evident that free economic activity in markets invigorates society," said Hatoyama, 62, who swept to power in August elections, ending more than half a century of almost unbroken conservative rule.
"But it is also obvious that the idea of letting markets decide everything for the survival of the strongest, or the idea of 'economic rationalism' at the expense of people's lives, does not hold true any more." "