The Perils of Insta-Commentary

In Friday's story for The Big Money I wrote about the likely winners of the crash: Bank of America's Ken Lewis and JP Morgan's James Dimon. Well, I do believe there will be winners in this--every disaster gives someone a chance to capitalize on it.

It's now two days later, and as of about an hour and a half ago ... there's no bailout. Ergo, as yet, no winners. Or not the winners I predicted, at any rate. I'm not ready to say I'm wrong--just premature. We'll have a bailout of some sort at some point soon. I think. But I should be more wary of calling the future, because even if there's a bailout, what happens after can be just as unpredictable as the lead up.

I speculated that the chiefs of Bank of America and JP Morgan seemed to be making a very safe bet picking up their competitors on the cheap and counting on a bailout to limit their losses. How much confidence do I have in that thought now? Less than last week, for sure. Things will get worse, not better, for the no income, no doc, no nothin' loans that were the stock in trade of companies like WaMu. Whoever is holding all those bad loans when the music stops can spend years stumbling along and paying off the damage. And whatever bailout we've got could be a lot less generous to banks than they'd like. Wait, didn't I just swear off the prediction business?