Second interview with the hedge fund manager

I love the jargon. "Brain Damage" means inconvenience. The meaning is apparent to anyone who thinks for a living, but says it with drama.

About the Bear Sterns bailout:

"If you really look at what the Treasury and/or the Fed was doing, they know that they have to protect the financial system from grinding to a halt, but they don’t want to create a moral hazard as a result of people thinking they’re going to get bailed out no matter what. So yes, there was a bailout of the counterparties, but they needed to take Bear out and shoot it in front of everybody. So they took it out, at a 2-dollar offer, all the senior management is gone, and that’s the financial equivalent of taking the shareholders out and shooting them."

Woops, trying to avoid a double post here--I left a comment on the "first" thread about this.