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Thread: weekend commentary - unbelievable BS surrounding B.S.

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    Default weekend commentary - unbelievable BS surrounding B.S.

    (snip)"March 14, 2008

    Elaine Meinel Supkis

    Bush says 'If we oversteer the car, we end up in the ditch.' HAHAHA. Instead, he and his gang drive us all off a cliff? A ditch is minor, a cliff is fatal. Bear Stearns is bearing down on the number zero. This news follows on the heels of the Fed $200+ billion rescue scheme that gave Wall Street total joy. Now they are in total panic as the obvious comes true. The NY Fed has had to reach deep into its futures pockets to pull a rabbit out of a hat for BS. And JP Morgan, one of the most over-extended, poorly-capitalized companies around, is supposed to rescue BS! And that is so much BS, it is a marvel that anyone could possibly believe that all this means the banking crisis is over rather than gathering steam, roaring ahead.


    Federal Reserve Board of Governors Press Release

    Release Date: March 14, 2008

    For immediate release

    The Federal Reserve is monitoring market developments closely and will continue to provide liquidity as necessary to promote the orderly functioning of the financial system. The Board voted unanimously to approve the arrangement announced by JPMorgan Chase and Bear Stearns this morning.



    Gas hits record high. Stocks soared on the news that we had no inflation last month due to oil not shooting up in price but it has shot up since then, obviously. The Fed has glommed onto those statistics to crow, there is no inflation and this will allow them to drop interest rates to 2%. On the road to Tokyo! We will be at 0% loans with 0% down Hog Heaven! Gold hit $1,000 an ounce as the reckless Fed tries to save a bunch of sneering, self-centered, destructive pirates. Yo-ho-ho, says Bernake as he dons his Santa suit.

    There is something rather sad in all this. The Fed has an obligation to explain to us how these Perils of Pauline rescues are being engineered. Second, they should refuse to lift a finger unless first, all the clowns who are in trouble cough up every penny of their ill-gotten bonuses. These get transfered to the Fed's FOREX reserves vaults. These criminal creeps collected record billions in bonuses this Xmas despite the obviousness of the unfolding collapse. They didn't care. They wanted their loot.

    NOT ONE has given up ANYTHING. True, the US/EU/UK/Japan banking consortiums, based mostly on offshore tax havens, will suffer and through them, our economy will flounder. But only for a brief moment. If we arrest all the cheats who refuse to pay taxes and who took multi-million and even multi-billion bonuses in the last 7 years, the money we get back will cover some of the cost of unwinding the messes they made trying to earn these bonuses. Morally, I am very offended by this latest rescue operation. Worse, the lowering of interest rates to rescue all these idiots is going to weaken our nation, destroy our currency and steal money from savers!

    Why should America be destroyed in order to save the very people who are eating up our infrastructure, our finances and our industries? Eh? This should be topic #1 rather than glossed over.


    Bear Stearns Gets Emergency Funds From JPMorgan, Fed

    Bear Stearns Cos., teetering on the brink of collapse from a lack of cash, got emergency funding from the Federal Reserve and JPMorgan Chase & Co. in the largest government bailout of a U.S. securities firm.

    After denying earlier this week that access to capital was at risk, Bear Stearns Chief Executive Officer Alan Schwartz said today that the 85-year-old company's cash position had ``significantly deteriorated'' in the past 24 hours. The central bank agreed to provide financing through JPMorgan for up to 28 days, the bank said in a statement today.



    Arrest Schwartz. Arrest anyone who so blatantly lies! This con man was selling stocks based on total fabrications which he knew were lies. Trusting investors were told, all was well, the books were balanced, etc. But this was false and the man who said these things wasn't ignorant of the truth. He was an insider using his position to boost stocks he knew were worthless. This duplicity is at the heart of the mess we see. Goldman Sachs recently gloated that they shorted the exact same instruments and funds they were peddling to trusting investors who lost everything. This sort of thinking infests all these hot shot big shots.

    If a used car salesman tells you a car is running just fine and mechanics have checked it out and given it an AAA rating but then a week later the engine blows and you discover the mechanic was a drunk who was paid to give it the AAA rating, this is criminal and the two can go to jail or at the least, lose their license to sell used cars. Of course, Bear Stearns bosses had to keep up the fiction that their car had 8 cylinders, not 7. So they lied about it."(snip)


    Please understand what's really going on here. Via the primary dealer bank JP Morgan Chase, the Fed is now trading newly minted US Treasuries and newly printed US dollars for toxic derivative paper held by wheeler-dealer hedge fund enabler Bear Stearns in order to save their asses from bankruptcy. These 'trades' have come under the guise of being 28 day loans, but in reality there is little chance that any of these 'loans' can ever be redeemed. So the US Fed will be stuck taking however many hundreds of billions of dollars worth of losses on the toxic derivative paper it is accepting as collateral for 'emergency loans' to Bear Stearns.

    Of course, US taxpayers have already been signed up as unwitting co-signers. So besides the ongoing destruction of the US dollar caused by yet more hundreds of billions of dollars worth of new T bonds and US dollars being printed out of thin air to finance 'emergency loans' to Bear Stears - that will stick US taxpayers with ever higher prices for oil / food / everything - those US taxpayers will also wind up being stuck with a massive tax increase sooner or later in order to cover the Fed's losses when the hundreds of billions of dollars worth of toxic derivatives paper collateral from Bear Stearns now held by the Fed (and 'purchased' at face value) will have to be dumped at a price of pennies on the dollar.

    The ultimate insult is that Bear Stearns isn't even a bank, it is a financial investment firm. As such, Bear Stearns does not have too many customers who are working class people, such that if Bear Stearns were allowed to fail hundreds of thousands of individual working class Americans might wind up taking hits on their credit cards / car loans / home mortgages. Instead Bear Stearns caters to 'qualified' investors (i.e. $1 million+ net worth), Bear Stearns caters to (offshore) hedge fund investors, Bear Stearns caters to merger and acquisition speculators etc. Under any sort of normal circumstances, Fed rules would NOT permit intervention to save such a 'non-bank'. However, the Fed has called on emergency situation laws left over from the 1930's to facilitate this bailout, which will forestall Cayman Islands tax avoiding multi-millionaire Bear Stearns investors from taking losses at the expense of regular Americans who DO have to pay taxes.

    If regular Americans were being told what's really going on with the Bear Stearns bailout by mainstream financial media, they would probably be screaming. This is exactly the reason that the whole bailout is going down with little more than a single paragraph appearing in mainstream financial news reports.

    ~
    Last edited by Melonie; 03-15-2008 at 09:27 PM.

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    Default Re: weekend commentary - unbelievable BS surrounding B.S.

    It's just a liquidity problem! (Going broke does tend to have that effect on your cashflow...)

    As it was happening:
    http://www.nuclearphynance.com/Show%...stIDKey=112291
    They make all of their 14,000 employees sell one of their kidneys. Bear kidneys are huge and therefore valuable.
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    Default Re: weekend commentary - unbelievable BS surrounding B.S.

    ^^^ relative to your link, 2 THOUSAND basis points for 'insuring' against a Bear Stearns default for one year ? Wow, that's the equivalent of a 20% 'interest' charge !

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    Default Re: weekend commentary - unbelievable BS surrounding B.S.

    it also appears that the 'domino effect' may already be underway ...



    (snip)"JOE LEWIS, the secretive British billionaire, has lost an estimated $800m in the collapse of the American investment bank Bear Stearns.

    The 71-year-old currency trading tycoon, who runs his empire from the Bahamas, holds almost 10% of the bank's shares. Bear’s shares fell 40% on Friday to $27, after it secured a 28-day credit lifeline to stave off collapse.

    Lewis began building a stake in Bear last September, when the shares were changing hands for more than $100.

    The huge paper losses could force Lewis to sell out of some of his other positions, according to traders, in order to meet margin calls from his lending banks.

    Bear Stearns stands on the brink of collapse or break-up this weekend. The bank’s woes come as Wall Street braces itself for another week of pain.

    Some of America’s biggest financial institutions are set to announce first-quarter figures showing fresh losses and write-downs of billions of dollars.

    The disclosures come amid desperate attempts to bail out Bear Stearns, which secured a 28-day lifeline on Friday to stave off collapse. That would have caused a sale of Bear’s $42 billion (£21 billion) of loans and $176 billion of securities that could have triggered a meltdown in the financial markets.

    On a Friday conference call, Bear’s chief executive Alan Schwartz said the bank was considering a full range of options - a statement many took to mean the bank is on the block. Lazards is advising Bear on its options.

    JP Morgan Chase has stepped in alongside the Federal Reserve Bank of New York to provide emergency funding.

    Jamie Dimon, JP Morgan chief executive, is interested in Bear’s prime brokerage business and parts of its mortgage operations, according to sources.

    “Bear Stearns is over,” said one banker. “By the end of the month - if not this weekend - someone is going to come up with a plan to take it out or break it up.”

    Wachovia, the giant American retail bank, is also said to be interested in parts of the business and so is JC Flowers, the private-equity group that attempted to buy Northern Rock.

    A takeover is not expected to place a high value on Bear Stearns shares, which lost almost half their value on Friday.

    Richard Bove, a banking analyst at the Punk Ziegel investment bank, said he thought a buyout was likely to fail, as it did with Britain’s Northern Rock. “I don’t think the Fed will approve a purchase,” he said. “Customers are leaving in droves, so what would they be buying?”

    Bove said Bear was “a new Northern Rock” that would be propped up by the government as it dwindled away. He predicted the bank will limp on, losing clients, until it ends up being a regional broker.

    Bear’s woes come as its blue-chip rivals prepare to announce first-quarter results. Analysts have cut their 2008 earnings outlook for Bear Stearns, Goldman Sachs, Lehman Brothers and Morgan Stanley. Bove said the results were less important than the strategy the banks were now following. “We have a totally mismanaged economy in America and that has been allowed to happen because the rest of the world accepted our debt.

    “Well that’s over and now, like a banana republic, we are going to have to prove we are sorting out our act.”

    The Bear Stearns crisis has reinforced the view that the Federal Reserve will cut interest rates this week by 0.75 percentage points, rather than 0.5, which would take the Fed Funds rate down to 2.25% – three points below last year’s peak.

    Some analysts even think that the Federal Reserve may try to calm the markets by cutting rates by a full percentage point at its Tuesday meeting.

    “We now expect the Fed to cut by 75 basis points on March 18, 50 in April, 50 in June and by a final 25 in early 2009, bringing the Funds rate back down to 1%,” said Ethan Harris, an economist with Lehman Brothers. “Who says history does not repeat itself?”

    In Britain, nerves could be set on edge if the February inflation figures – also due out on Tuesday – show a decisive rise above 2.5%, from 2.2% in January.

    While Mervyn King, the Bank of England governor, has primed the markets to expect a significant rise in inflation in the coming months, any sign that it was moving higher at an unacceptable pace would be seen as limiting the Bank’s room for manoeuvre on interest rates. "(snip)

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    Default Re: weekend commentary - unbelievable BS surrounding B.S.

    $2! (We were a bit shocked at the office when this came through...)

    http://www.iht.com/articles/2008/03/...ess/17bear.php
    http://online.wsj.com/article/SB1205..._us_whats_news

    I feel sorry for people who have been building up Bear Stearns their whole lives
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
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    Default Re: weekend commentary - unbelievable BS surrounding B.S.

    Quote Originally Posted by Melonie View Post
    ^^^ relative to your link, 2 THOUSAND basis points for 'insuring' against a Bear Stearns default for one year ? Wow, that's the equivalent of a 20% 'interest' charge !
    If you're stuck on the wrong side of a trade and the market evaporates, I find sometimes these "worst-case" prices pop up and get hit. Who else will trade with you? At least you limit your losses, big as they may already be.
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

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    Default Re: weekend commentary - unbelievable BS surrounding B.S.

    Quote Originally Posted by Melonie View Post
    it also appears that the 'domino effect' may already be underway ...

    JOE LEWIS, the secretive British billionaire, has lost an estimated $800m in the collapse of the American investment bank Bear Stearns.

    The 71-year-old currency trading tycoon, who runs his empire from the Bahamas, holds almost 10% of the bank's shares. Bear’s shares fell 40% on Friday to $27, after it secured a 28-day credit lifeline to stave off collapse.

    Lewis began building a stake in Bear last September, when the shares were changing hands for more than $100.

    The huge paper losses could force Lewis to sell out of some of his other positions, according to traders, in order to meet margin calls from his lending banks.
    In yesterdays Sunday papers, there were comments already that this could hit Tottenham Hotspur - a Premiership football club - in which he has a majority stake. With the world being so interconnected these days and the big players owning stakes in all sorts of assets, the potential ramifications could be very widespread.

    I'll try and stay positive...

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    Default Re: weekend commentary - unbelievable BS surrounding B.S.

    So, is this gonna become more common? You know, the government continuing to stick its dick in the market? Just curious.

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    Default Re: weekend commentary - unbelievable BS surrounding B.S.

    It would have been highly risky for other Wall Street firms if Bear Stearns had been allowed to go under because they are tightly interconnected with Bear as both borrowers and lenders. Any firms that are owed a lot of money by Bear would have fallen under suspicion, on grounds that they might not be able to pay their own debts if Bear failed to pay them. That could have triggered a dangerous wave of defaults.
    http://www.businessweek.com/bwdaily/...pStories_ssi_5

    The problem with credit default risk is that you can end up with a Domino effect if supposedly rock-solid parties start to default. Eg. Company A needs to pay Company B a big pile of money but Company A goes broke. Oops, now Company B doesn't have the cash it thought it would have, and was due to pay Company C. Who now can't pay Company D. And then shareholders panic and sell and the market collapses.

    The idea of the Fed doing all this lending is to let Company B,Company C and Company D keep operating while this temporary cashflow problem is worked out. But as an uninformed Australian I reckon it's not a temporary problem and they'll all go broke Fed is now lending to Lehman Brothers, for eg.
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
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    Default Re: weekend commentary - unbelievable BS surrounding B.S.

    So, is this gonna become more common? You know, the government continuing to stick its dick in the market? Just curious.
    As long as the US taxpayer continues to 'pay the prostitutes', I'm afraid that the answer is yes ! We'll find out just how committed the FED is to keeping interest rate spreads sky high (and trashing the US dollar, and boosting inflation etc.) when the FED announces another rate cut later today.

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    Default Re: weekend commentary - unbelievable BS surrounding B.S.

    just for the hell of it i tried to put in an order for 1000 shares on monday... for whatever reason, i couldn't get it filled...

    i'll consider it a good omen and search elsewhere for a place to keep it... maybe i'll check CL for some Contents sales for some gold and metals... U know, keep it cash...
    Last edited by XxAmber89xX; 03-19-2008 at 07:28 AM.
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