L'Information est d'Or

So funny...

John Mack, CEO of Morgan Stanley, said today: "we are in the midst market controlled by fear and rumours and short sellers are driving our stock down." At the start of the year, I asked in one of my blog posts: "After Nothern Rock, Bear Sterns, who will be next?" Well we have now the answer: it is Lehman Brothers and AIG that went under. Lehman is now under administration and AIG has been refinanced by the US government. This prompts two comments. 1. It is traditional, considered low risk institutions that have been hit the hardest by this financial crisis, and not the sophisticated and highly criticised institutions like hedge funds or private equities. Indeed, AIG was rated AAA by Standard and Poors no sooner than a few days ago. 2. The business model of investment banking itself seems to be broken. Hence, the last decade has seen the disappearance of Bearing's, JPMorgan, Bear Sterns and Lehman Brothers as independant entities( and even disappeare...

As real-estate companies have been thrashed in the markets, there are now good opportunities for buyers with a sensible long term strategy. And guess who that would be? The oracle of Ohama... http://www.bloomberg.com/apps/news?pid=20601109&sid=a6vQNjd7KR0A&refer=home Cyrille