Posted on 04/09/2008 6:50:07 AM PDT by Toddsterpatriot
Bear Stearns is going away. Investors, officers and employees are taking huge losses. Many employees will lose their jobs.
But if you can make money from the government jumping in here and there, that's fine and dandy. lol
I didn't own any shares of Bear Stearns. I didn't make any money when it went from $54 to $30 on Friday, March 14th. I didn't make any money when the announcement came out on Sunday, March 16th. I didn't make any money on Monday, March 17th when it dropped to $3. I didn't make any money when JPM raised their offer to $10.
JP Morgan.
The Fed isn't loaning any money to JP Morgan.
If the securities are worth less than the $29 billion the Fed has guaranteed, the Fed takes the hit.
If the securities are sold for less than $29 billion the Fed will absolutely take a hit.
Yes. But not to Bear Stearns and not to JP Morgan.
What kind of loan gives the lender a cut of the profits in addition to the interest payments? Is there any other entity making that kind of loan? When I get my next mortgage, I want to make sure it's not that kind of loan -- what's the term for that feature of the loan?
A new entity which will hold $30 billion of securities.
and, if said borrower doesn’t pay it back, who’s out 29 gigabucks?
The New York Fed.
They'll probably prevent some issues and make other problems worse.
What do you think about Sarbanes-Oxley?
And we are setting a precedent here for corporations to make poor business decisions without worry because they know the government will give them corporate welfare or a safety net
Countrywide and New Century Finance made poor decisions. I don't remember the government doing anything to help them.
Ummm, yes, they are. The securities are collateral for the loan. It's off-balance sheet for JP Morgan, just as SIVs were off-balance sheet for banks, but the ultimate beneficiary of the loan is JP Morgan.
Ummm, no, they aren't.
The securities are collateral for the loan.
You bet. $30 billion of securities that belonged to Bear will be collateral.
It's off-balance sheet for JP Morgan,
Why would securities not owned by JPM and money not loaned to JPM be on JPM's balance sheet?
Big deal. $30 billion taxpayer’s money is put at risk to bail out these guys. They Bear Stearns stockholders were sacraficed so that the securities could be propped up? Who holds those securities? Well JP Morgan for one. And who was voting to approve this deal? The New York Fed. One of whose 9 voting governors is Jamie Dimion, Chairman of JP Morgan. Also Richard Fuld, Chairman of Lehman Brothers, the firm considered most exposed after Bear. While we are at it we should also consider Jeffrey Immelt, CEO of GE, which has a huge investment banking business.
The deal was approved (that is the person who signed off on the taxpayer risk) is Sec. of the Treasury Paulson, who is a former head of Goldman Sachs.
If you don’t see the huge, gigantic conflict of interest in this deal I feel sorry for you. The author is just another apologist trying to make us feel better about being screwed over by the Fed.
This bailout is only the most visible of the many steps the Fed has taken in the last three weeks to shore up these banks. All of them are a big part of the reason that one US Dollar is worth on Swiss Franc today, not two or three as in the past.
Borrow money at 3% and lend it back to the stiffs at 20%. (or more!). Yes, that is a government license to steal, and the folks at the top are making good use of it.
Hahahah repeate a lie often enough and long enough people will believe it. You and I just picked up the tab for Billionaires to keep their jobs.... over 30 years of horrific Fed and Trade policies began to unravel.. and all they did was stick us with a bill to put it off for a little while longer.. so it will be that much bigger of a mess down the road. Anyone who has one ouce of faith in the system at this point is beyond gullable.
Where’s the New York Fed going to get 29 gigabucks to pay out if the loan goes bad?
Where did I suggest that? They are off-balance sheet. Just like a SIV. Only this off-balance sheet item will never have to be moved back on-balance sheet (unlike many SIVs) due to the Fed guarantee. Who benefits from that?
Anyone in the business will tell you this was a loan to JPM, regardless of how the deal was technically structured.
When did the FED get a mandate to make the financial markets work? The FED is supposed to be the lender of last resort and regulator of money center banks. Bailing out rich guys like LTCM isn’t part of their job. In fact Greenspan maintained that he was acting as a private citizen to broker that deal. (For one think Long Term was located in the Caymans to avoid US Taxes, but they still got the royal treatment.)
Last I checked it’s the SEC that is supposed to monitor investment houses.
This was a huge, unprecidented change in Fed policy. And of course, it was not based on any new direction from Congress. Ben does what Ben thinks he must. Because he is a freaking GENIUS just like Greenspan was a GENIUS. We always have a GENIUS running the FED. So no one needs to even look over their shoulder and notice stuff like the CEO of JP Morgan being a director of the NY Fed.
Or running a lottery ....
The Fed has a portfolio of bonds. Last time I checked it was over $800 billion.
The simple answer is: yes.
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