When Bear Stearns was going down in flames, Morgan Stanley and Goldman Sachs traders were short selling Bear stock as fast as they could. Think of it as pouring grain alcohol on a blow torch.
This week, Morgan Stanley's and Goldman Sachs' stock prices were getting hammered and, allegedly, the short sellers are responsible.
So, what did Treasury Secretary Henry Paulson do? (Um, yes - he used to be CEO of Goldman Sachs before he was Treasury Secretary.)
He got together with SEC chairman Chris Cox and said "Let's ban short selling in financial stocks until October 2. Maybe that will help!"
Then, he got together with President Bush, Fed Chair Ben Bernanke and Congress and said "Let's bail out Goldman and Morgan with taxpayer money!"
Well, it seems to be working. Both Morgan and Goldman stock prices are up big today, along with the rest of the market.
Next time a Morgan Stanley or Goldman Sachs executive parks his Ferrari near you, make sure you walk up to him demand that he let you drive it. After all, you now own a piece of it.
And fear not - the same federal government that has run up record deficits and debt is now making investment decisions to the tune of hundreds of billions of dollars. With YOUR money.