Posted on 04/04/2008 3:22:53 PM PDT by Lettuce-defend-Her
“Explain the logic of this? The Bank of Bernanke takes $29 billion in Bear's toxic real estate debts, but lets Bear Stearns' skyscraper go to JPMorgan for a song? Why didn't the Fed take control of Bear's one real asset and rent it out to JPMorgan with the proceeds going back into federal coffers?”…American taxpayers are potentially on the hook for $29 billion…yes, $29 billion…
“$66 billion. That is the record amount of money Wall Street's top five firms…paid out in compensation and bonuses last year to their 186,000 employees…”
“At Merrill Lynch, they paid out $15.9 billion in compensation last year just weeks before the firm went hat-in-hand to secure a $6 billion lifeline investment”…
“Two weeks after Federal Reserve Chairman Ben Bernanke masterminded the purchase of Bear by JPMorgan Chase, one thing is crystal clear: JPMorgan shareholders are richer to the tune of $24 billion, Bear shareholders are several billion dollars better off than if the firm went totally bust, and American taxpayers are potentially on the hook for $29 billion”…
(Excerpt) Read more at financialsense.com ...
Makes perfect sense to me.
/
We need to hand all central bankers.
Can you finish that sentence? lol
I can expalin quite a bit of it:
About the entire argument made in the article is bogus.
The securities pledged to the Fed are not the Bear Sterns toxic debt. It would be wonderful if this writer knew something about the situation he is writing about. Being a nonsense spinmeister is just so much easier if it is not necessary to tell the truth.
1. Why didn’t the Fed take control of Bear’s one real asset and rent it out to JPMorgan with the proceeds going back into federal coffers?”
Because Bear wouldn’t do the deal without the building, is this guy crazy? Without the deal our financial system would have been in turmoil and cost Americans Trillions, and these bonds will not cost the taxpayers 29 billion..they will recover their value as they age. If the FED has to hold them 10 years who cares?
2.“$66 billion. That is the record amount of money Wall Street’s top five firms…paid out in compensation and bonuses last year to their 186,000 employees…”
So now he wants the government to limit compensation and bonuses in a system of capitalism...how absurd. They pay them this much because if they didn’t they would leave, because competitors would pay them this much. Pretty simple concept.
“At Merrill Lynch, they paid out $15.9 billion in compensation last year just weeks before the firm went hat-in-hand to secure a $6 billion lifeline investment”…
Yeah, and if they wouldn’t have paid them they would have left.....and so what if MER secured 6 Billion...it saved the firm and they will be worth much more in the future, especially with John Thain running it. All kinds of firms raise money EVERYDAY from public markets.
“and American taxpayers are potentially on the hook for $29 billion”…
NEVER HAPPEN..utter BS!!
So socialism is OK as long as the stakes are high enough?
“So socialism is OK as long as the stakes are high enough?”
I think what the poster meant was that it is in the national interest for these banks, many of which have become unable to meet their obligations, and whose stockholders have seen their investments made virtually worthless, to provide their employees many billions in financial rewards, lest they decide to leave and infect other areas of the economy.
Fortunately for us a system, sort of an errors and ommissions insurance for mega banks is already in place called the Federal Reserve. This is far too complicated for ordinary taxpayers like you and me to understand. But would we really want these wizards out working in our transportation, food and defense industries?
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