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170 Comments
- chase001, on 03/16/2008, -7/+101Privatize corporate profit and socialize corporate loss. If this isn't Fascism, corporate interests before the best interest of the People, I don't know what is.
- inactive, on 03/16/2008, -9/+101Once again your tax dollars at work bailing out the rich!
- jdaniel284, on 03/16/2008, -6/+92The neo-con mantra: privatize profits, socialize risks.
This allows the rich to entertain high-risk investments they normally would not be willing to shoulder. If the investment pans out, they alone enjoy the large profits that are born from the high-risk investments. However, if the investments turn sour, the penalty is distributed among all holders of the U.S. Dollar.
This is certainly not capitalism and offers very little political or financial liberty. - rhabd0mancer, on 03/16/2008, -8/+64Can we finally put to bed the notion that Republicans are good at managing the economy?
Thanks. - sgiffy, on 03/16/2008, -4/+46This is not really a bailout. The company is done. It will be bought up either in whole or in pieces before the end of the month. What the Fed did is exactly what they are there to do. They lent Bear money through JP so that it would not collapse. In essence, they provided liquidity. Remember it was a lack of liquidity in financial institutions that helped give us the Great Depression.
Bear had to put up collateral, likely with a pretty big haircut. Meaning that the collateral is much more valuable then the amount being lent. The money lent sprung into existence when it was lent, it did not come form taxes, and when it is repaid, likely by whoever buys bear, the money will disappear.
The problem was not that Bear was worthless, but that it had no cash. This makes it impossible for them to honor their contracts with others and do what companies like them do. Had nothing been done and they had defaulted, many more would follow, and countless people would lose their jobs, retirement, and savings. That's a recipe for pretty sever financial disaster.
Not to mention that because deposits in brokerage accounts are insured, the government would have to replace the lost value and that would cost the taxpayers a lot. - Moonkeeper, on 03/16/2008, -3/+36Amazing. Through the use of a bunch of "procedures" the effective flow of money comes from the US taxpayer and goes to the big business bank.
- statik99, on 11/03/2009, -3/+31Chase always seems to hire the worst debt collectors too... So, if/when Bear Stearns can't repay and the "fed" has to incur the loss, does that mean all Americans will start getting phone calls from debt collectors?
- lohphat, on 03/16/2008, -6/+29I thought Republicans were against welfare?
Oh, unless it's for the rich.
I wonder how much bonuses the BS managers will walk away with? - thechitowncubs, on 03/16/2008, -3/+24Right now, facism with socialism for the rich.
- roosevans, on 03/16/2008, -12/+33If I am not mistaken, The Federal Reserve is not a government institution but rather The Federal Reserve is itself a consortium of private banks that basically control the American economy. This is a case of the rich bailing out the rich!
- slicerace, on 03/16/2008, -10/+29You are mistaken.
"The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central banking system of the United States. Created in 1913 by the enactment of the Federal Reserve Act, it is a quasi-public (part private, part government) banking system[1] composed of (1) the presidentially-appointed Board of Governors of the Federal Reserve System in Washington, D.C.; (2) the Federal Open Market Committee; (3) 12 regional Federal Reserve Banks located in major cities throughout the nation acting as fiscal agents for the U.S. Treasury, each with its own nine-member board of directors; (4) numerous private U.S. member banks, which subscribe to required amounts of non-transferable stock in their regional Federal Reserve Banks; and (5) various advisory councils. Currently, Ben Bernanke serves as the Chairman of the Board of Governors of the Federal Reserve System."
http://en.wikipedia.org/wiki/Federal_Reserve
The Federal Reserve is the bank of banks -- they are the ones who lend money to the banks at the federal funds rate. The purpose of the lending is so that when too many people withdraw money from a bank, the bank can take out a loan . - Narrator, on 03/16/2008, -1/+19You're damned right it's not capitalism. There are criticisms of our current form of capitalism other than Marxism but they are not taught in schools because they are far more subversive to the current system than Marxism. The rest of the world finally figured that capitalism is not only what the IMF and the world bank say it is over the last 10 years and now they are kicking the stuffing out of the developed world, especially the U.S.
- azimir, on 03/16/2008, -0/+18Make sure to check the chamber and safety.
- PHiZ187, on 03/16/2008, -6/+23Financial conservatives (Like The Economist Magazine, and Wall Street Journal) bitch and moan about how regulation cripples a free-market, but they're all for bail-outs when CEOs mismanage their companies. Pathetic.
- bxblox, on 03/16/2008, -5/+22The fed once again socializing debt. "Made some money? good for you! Lost it all? Here's some more, try again!" Did anyone see the Secretary of Treasury ***** on why the Fed made the right move?
- oOLiquidNightOo, on 03/16/2008, -2/+18buy stock in diapers.
- gnoshme, on 03/16/2008, -1/+15Most of them already do
- nirav72, on 03/16/2008, -2/+15Its kinda funny - I was at Chase the other day opening up a new checking account. They were giving away a free ipod if you opened a new account. So while the branch manager was doing my paperwork, he asked if I was interested into looking at some of their retirement funds. At the same time , I was looking down at my blackberry reading a email alert I had received with a news headline about the Bear & Stearn fiasco and J.P Morgan Chase. I said..Nooo thanks..I just want a checking account and my free ipod. Walked out of there before they tried another sales pitch at me.
- sockpuppets, on 03/16/2008, -3/+15I'm hoping you just have a reading comprehension problem and misunderstood him.
- bromac, on 03/17/2008, -3/+15It also prints paper money and funds the federal debt. You could say it's the bank of the government as well, even though the government inherently has the power to control its currency.
When the hell did Digg start defending the Fed? In my opinion, the Federal Reserve system and the income tax that was created to pay the Fed interest on national debt was the biggest scam committed in recent history. - inactive, on 03/16/2008, -1/+11 Yes but they are private institution who always seems to be making money and never losing. Is it so hard to believe that when it comes time to pay that the burden will transferred to the American people? Judging by the history of the Feds shareholders I find it likely.
- 9mmCensor, on 03/16/2008, -1/+11No because the Fed is a private institution.
- CogitatorX, on 03/16/2008, -2/+10Check out and see how much money BS employees have "earned" in the fine efforts they made to put BS where it is now. If the government was so concerned people like these and the Enron folks would at least be treated as harshly as a kid caught with a joint. Instead we the taxpayers get to pay for their theft while our national infrastructrue crumbles to *****.
- Schul983, on 03/16/2008, -1/+9If bear stearns goes down say hello to the biggest stock market crash of this generation as well as hard times for a long time. It's a realy ***** situation but something has to be done.
- andy314159pi, on 03/16/2008, -1/+9Tthe Federal Reserve is taking on the risk associated with the investment, and as you know, risk has been commoditized. They are providing a commodity free of charge, so it is corporate welfare.
- bsmang, on 03/16/2008, -7/+15The more I learn about this deal, the worse it seems. What the hell do you do if the economy totally ***** the bed?
- Ubermann, on 03/17/2008, -1/+9Here is the kicker - the Fed just hits a button to make cash available for the load OUT OF THIN AIR.... diluting the US$ even more. This economic crunch is not because of sub-prime mortgages - its because the Fed has been hitting that button too much to pay for our wars. The dollar started to crumble way before the mortgage crisis. Wake up people.
- devophl, on 03/16/2008, -0/+7Chase has to buy out Bear Stearns... That's it. Bear Stearn lost out because its portfolio is so riddled with holes that no one will lend it money any more. Stearns essentially became insolvent on Friday morning when it no longer had money to make its margin calls. When this happened, it triggered a quick action. Bear went to the Fed but it wasn't going to take Bear's wounded portfolio either so Chase stepped in a acted as a mediary. Its unlikely Bear will be able to pay back the loan so it will fall back in Chase to either cover Bear, buy them out or default themselves on the Fed loan. Chase can't afford either option A or C so it has to buy Bear out. But Bear's liability will hurt Chase and put them at risk as well. This is not looking good for the US banking industry!
- inactive, on 03/17/2008, -1/+8Yeah, whatever happened to the days when a company that ***** up was allowed to fail? I'm sick of the US government mopping up for ridiculous businesses by giving them a huge payday. Look at how many times the failing airlines have been bailed out.
I thought capitalism meant survival of the fittest, and if a business sucks, it dies and nobody steps in to perform CPR. - QuantumBios, on 03/16/2008, -5/+12Pretty soon Bernake is going to need a helicopter to escape the American People, not dump worthless Federal Reserve Notes from. Oh, and guess who the ONLY Presidential Candidate addressing this issue is?
- cambob76, on 03/16/2008, -2/+8Start growing your own food.
- inactive, on 03/17/2008, -1/+7That's correct, however, the big drawback here is that when the Fed prints more money, the dollar drops in value instantly. Ours is a fiat currency, the only thing that gives it value is how much is in circulation. Therefore, the more they print, the less it's worth. Also, every dollar from the Fed comes with a percentage rate attached, so hot off the presses a dollar isn't even worth a dollar.
- Narrator, on 03/16/2008, -0/+6They invented the Soverign Wealth Fund. That is something totally new and unprecedented. Before that export earnings to the U.S were almost exclusively recycled into U.S Treasuries.
- JulieZPR, on 03/16/2008, -2/+8It may or may not be facist,but it sure the hell is infuriating. The Fed says it can not let the company go bankrupt as it will topple other financial systems, but capitalism has to work here.
- Ubermann, on 03/17/2008, -2/+8Oh - BY THE WAY...... JP Morgan Chase is a MAJOR shareholder of the Federal Reserve Bank.
- d03boy, on 03/17/2008, -3/+9The entire problem is that the government COULD run their own currency at 0% interest instead of making citizens pay for it by the fed... its bs if you ask me
- FaithclubDotNet, on 03/17/2008, -0/+6News as of today: Jp Morgan Chase buys BS
http://news.yahoo.com/s/ap/jpmorgan_bear_stearns - inactive, on 03/16/2008, -3/+9Bush's America = Enron
- noloveIII, on 03/16/2008, -0/+6war
- littlerockblog, on 03/17/2008, -1/+6Hmmm...funny how when some money problems hit the top of the totem poll everyone at the top tries to find a way to help out at all cost, but when people are losing their homes the banks try and foreclose ASAP!!! WTF?
- bjornski, on 03/16/2008, -2/+7Why don' t you enlighten us?
- maroger, on 03/16/2008, -3/+8Hope the feds help out with my mortgage I haven't been able to pay on my home...
- luchid, on 03/17/2008, -0/+5Slightly?
- inactive, on 03/17/2008, -2/+7The reserve system is a fraud on the taxpayer. They are a smoke screen for graft. You must believe in the easter bunny and santa too.
- wakananda, on 03/17/2008, -0/+5That's right. It's a debt-based system, that creates more debt just by existing. It's non-sustainable. We could have a non-debt, fiat currency issued by Congress, without a Fed middleman leeching profit into anonymous foreign coffers. We DID, in the colonies, until the Bank of England threw it's weight around and had Parliament outlaw colonial scrip. It was too successful, and threatened their debt-based chokehold on England! In his autobiography, Ben Franklin cites this as the "Prime cause" for the revolution.
- oldgal, on 03/17/2008, -0/+5Roosevelt created jobs and built out infrastructure. We ended up with assets as a result of deficit spending. Today, rather than ending up with assets, we are ending up with the deficit being held by foreign entities. China could cause a run on the banks anytime they want. They would also lose money, but nonetheless, I think they are in the stronger bargaining position.
- rxbudian, on 03/17/2008, -3/+8The Feds is not a government agency, it's a private monopoly.
- mattes5, on 03/16/2008, -0/+4.... lack of credit expansion caused it ..... Smoot-Hawley Tariff Act prolonged it and World War 2 production ended it
- Yez70, on 03/17/2008, -1/+5Bush stopped releasing the numbers on how much money was being printed years ago. So, the 'instantly' effect on inflation is gone and he rode most of his administration out only feeling the money supply/demand effect on inflation instead.
- eavonius, on 03/17/2008, -1/+5Sadly there are many documentaries on the Fed out there that state that they did this same thing prior the great depression - they agreed to bail banks out if people made a run on them. When this happened they bought up corporations for pennys on the dollar, NOT bailing them out. The Fed may be described as part government, part private - but their interests are purely private - the government part is only laws enabling them to control our economy. Unfortunately most folks are too busy watching the election and prostitution scandals to do some research - they don't want you to!
Woodrow Wilson is the president who enabled these laws to pass. On his deathbed he stated with great regret that he had ruined his country's control over policy by selling out to the banks. -
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