Pre market open thoughts
Paulson runs the show
1) Bear run on Goldman pisses him off (he came to Treasury from Goldman), he goes nuclear on shorters (via SEC)
2) Paulson know where all the levers are
3) Paulson let Lehman fail to put fear of god on the street
4) superb timing - Friday, option expiration
This adds to volatility and will likely further juice the market
So, who was behind the raid?
Overseas interests - possible, but sorta Financial Tom Clancy stuff
Hubris - most likely - and why Lehman went down, maybe AIG as well
Political ? did anyone want to make the Administration look even worse?
Nah
Likely just a combination of events and factors
Going forward, the financial will have changed, and, to my mind, for the better.
Time to pay attention to real world business, not obscure derivatives and instruments to removed from reality.
Sharing of risk is good, creating unnecessary risk is not.
Fee based trading is highly questionable.
Fee for true service is OK, fee for sake of fees causes problems.
Closing prediction - I expect some hedge funds to fold this weekend
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