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466 Comments
- bigtallmofo, on 03/27/2008, -30/+212Let me get this straight... JP Morgan keeps any profits, but the people pay for any losses.
W T F ?!?!
To add the icing on the cake - Paulson used to work for Goldman Sachs and he's just bailing out all his buddies. UNBELIEVABLE! - activerain, on 03/27/2008, -23/+119This is probably the most disgusting thing I've seen lately, and I'm so angry I'm shaking. The pig men of wall street are getting a bail out for screwing over the US taxpayer and we're going to end up paying twice. The bailout is illegal on many points, clearly violating the federal reserves congressional charter.
Bloomberg: Tax payers maybe liable for Bear Stearns Rescue - http://bloomberg.com/apps/news?pid=20601109&sid=aN ...
Bloomberg: Bear Stearns Sale to JPMorgan to Be Probed by Senate - http://bloomberg.com/apps/news?pid=20601087&sid=aA ... - kahakauai, on 03/27/2008, -17/+99Do we really need anymore evidence to impeach this piece of *****?
- tsberts, on 03/27/2008, -33/+106The Fed is not "saving us from financial disaster" -- they have created the existing financial disaster, and are making the coming fall much, much worse.
We ARE going to crash.
Our entire economic growth for the past four years has been based on a lie - housing value growth - brought about by Fed policy and enabled by creative accounting by the banks. The Fed and the banks have made BILLIONS by STEALING from US homeowners. Now they want us to bail them out? Hell no!!
It's like pregnancy. The Fed screwed up, and got us pregnant. Abortion would have been painful, but those days are long gone. We're now overdue for delivery. Prolonging the due date is only going to make the final delivery that much more painful.
Cry and deny if you want, but the baby is coming. The time to hide the pregnancy has long since passed. Now the father wants to take no responsibility and foot us with the bill? Hell no!
It's not just about being responsible and accountable, it's about following the law. It's long overdue that the rich and powerful live and die by the same rules that we do. You screw up, you pay the price. Sometimes, bad decisions mean you lose money. I, as a taxpayer, am not willing to bail you out now. We're going to crash. I'm not going down alone. No safety net for you this time. - EvansHall, on 03/27/2008, -36/+101I voted for Ron Paul.
- tsberts, on 03/27/2008, -23/+86This is EXACTLY why our forefathers got mad enough to declare independence: Remember "No taxation without representation" ?
Bernanke and Paulson, appointed officials, just taxed me, my wife, and my three kids to the tune of $1500. Bush backed him up. And I'm pissed off about it. When Congress votes and puts us on the hook for a $30 Billion bailout, then we can have a conversation. Until then, let's throw the treasonous bastards in the hole. - inactive, on 03/27/2008, -17/+55Get back to me when this shows up in more places than a blog and a letter.
- stormsailor1981, on 03/27/2008, -23/+55congress and ron paul should call for an immediate investigation. only congress can pass laws. no other branch can make up laws as they go along. the federal reserve is not even a government institution.
- bcomeaux, on 03/27/2008, -29/+59You people really don't understand the crap that would've happened if the hedge funds bear stearns lends to would've been forced to liquidate its assets. Sorry, but it WAS necessary. Don't be ignorant. I hate Bush, but he didn't do this and it was necessary. Oh what the hell, just bury and go back to being ignorant
- Magee1205, on 03/27/2008, -9/+36"But for now, we need to bail the water out the boat and see if we can plug the leaks. Allowing the boat to sink is not an option. And get this. You are in the boat, whether you realize it or not. You and your friends and neighbors and families. Whether you are in Europe or in Asia, you would have been hurt by a failure to act by the Fed. Everything is connected in a globalized world. Without the actions taken by the Fed, the soft depression that many have thought would be the eventual outcome of the huge build-up of debt would in fact become a reality. And more quickly than you could imagine."
-John Mauldin, Editor
Outside the Box
http://www.investorsinsight.com/otb_va_print.aspx? ... - Terr01, on 03/27/2008, -15/+41Yes, it's bad for many reasons...
But why the hell is this being paraded as "OMG grounds for impeachment!!111" after all the other stuff?
Bush has already thrown US citizens into jail for years without trial, lawyer, or charges. He's already been breaking the law tapping people's conversations. He's been declaring he has a legal right to continue doing both.
And somehow *this* is important by comparison? Or is it only important for a certain breed of conservative who don't give a damn about the Constitution but will lay down their lives for the "free market"? - inactive, on 03/27/2008, -4/+29we have separation of church and state, now we need separation of corporation and state.
- inactive, on 03/27/2008, -8/+31FYI, just because a guy cleans toilets at Marshall Space Flight Center doesn't mean he can fly the space shuttle.
- PATSCRU, on 03/27/2008, -12/+33Corporate welfare, ftw. Taxpayers ftl
- brokenspatula, on 03/27/2008, -23/+43apparently no one on digg understands the bear sterns situation
- syroncoda, on 03/27/2008, -16/+34SO ***** CALL FOR IMPEACHMENT. this is digg. and i may be a guy who thinks too much of this particular social network, but seriously now, ARE ANYONE OF YOU familiar with some lawyers or senators or whatever willing to show some balls and do it? anyone? how long is this going to take while it gets worse and worse? FIX THE COUNTRY NOW!
- inactive, on 03/27/2008, -10/+26Oh how the positive correlation between inaccuracy and popularity on Digg just keeps growing stronger....
- davbmn68, on 03/27/2008, -5/+22That's not exactly accurate. The F.R. is guaranteeing $30B in assets to keep investors from losing their shirts, because B.S. invested unwisely. This is an effort to keep liquidity to allow a buyout. This is why JPM upped their bid. The Federal Reserve is assuming all the risk here. The truth is B.S. assets will probably be worth alot more than $30B. The Federal Reserve stands to make money on this deal, in that any value above the $30 guaranteed will go to the Federal Reserve. A smart move on their part. Do you really think they would assume a huge risk like that? They are money people, they like MAKING money.
- Infidelcastr0, on 03/27/2008, -13/+28This entire administration has done nothing but find ways to essentially embezzle taxpayer dollars or at least make it easier for their cronies to do so.
- haircut1001, on 03/27/2008, -6/+20The Fed caused the problem when they chose to not regulate the banks. Now they want the taxpayer to foot the bill for their and the banks mistakes?
I don't think so. - MellerTime, on 03/27/2008, -6/+20Because this is about our money. And everyone knows we care a whole lot more about our money than we do our rights.
I totally agree with you, but at this point I'll take anything I can get... - cotaskmemalloc, on 03/27/2008, -14/+27Let the irrelevant hoard of diggers with tin foil hats rant on!
- inactive, on 03/27/2008, -21/+33Why are you replying to your own submission in a way that makes it sound like you are just learning about it now?
- jeffiek, on 03/27/2008, -2/+13When Congress votes on it you don't need a conversation, you need a bigger hole.
- mystere, on 03/27/2008, -10/+21Wow, I just can't believe so many people are this ignorant of both current events and the law.
A) The government didn't give JP Morgan money to convince them of anything, they ASKED for the money to facilitate the buyout.
B) The money is a short term loan, due back in 30 days. It was not money "given" to them.
People really should learn something about what it is they are railing against. It makes you look a little less like a douchebag.
(and no, I don't agree with the bailout, but the fact is it's not what people claim it is). - inactive, on 03/27/2008, -1/+12Willem Buiter on Bear Stearns
Willem Buiter has an angry blog entry about the decision by JP Morgan to raise the offer forBearStearnsfrom $2 to $10m, and the Fed’s acquiescence. While this has always been an equity bail out, not a loan from the Fed, the increase in the offer now means that the Fed is now bailing out Bear Stearns shareholders directly with public money. This is moral hazard in its purest form. Buiter jokingly suggests a class action suit by taxpayers.
John Plender on Bear Stearns
John Plender says in a commentary in the FT that bailout out Bear Stearns was the easy part of the credit crisis. Worse is to come. US house prices have a lot further to fall, and he adds there will be trouble from the corporate sector, whose balance sheets appear to be healthy, but which is facing huge liablities in terms of pensions, and falling equity prices.
Martin Wolf on the end of financial capitalism
Martin Wolf says that Friday, March 14, was the day when the dream of financial global capitalism died. He does not pass judgement on the Fed’s bailout of Bear Stearns, but says it is one of the most significant events in the history of capitalism, as it effectively ends what has been know as Anglo-Saxon capitalism, a world of securitised markets outside the main banking system. He recites words by Robert Frost that the world will either end in fire, or in ice – in a financial meltdown or with hyperinflation
Wolfgang Munchau on bailouts
In his FT Deutschland column, Wolfgang Munchau says the Europeans should not take part in any global co-ordination to bail out individual banks. He says this is probably not legal under European law, and even it were, it would be hugely mistaken. He says there is absolutely no case to bail out the shadow banking system, or the hedge fund industry. Nor is there a case to bail out every single bank. An example of a bank that should not be bailed out is IKB. Should it ever become necessary for government’s to bail out a bank, the bank’s senior staff, and supervisory board should be dismissed, before a bailout can proceed.
Daniel Gros on the difference between the Fed and the ECB
Daniel Gros has a comment in the FT in which he says that the difference between the two central banks is not so much philosophical, for example in terms of their commitment to fight inflation, but that both are facing different circumstances. In the US, housing loans are non-recourse. If a mortgage holders defaults, the bank has the risk. That is not the case in the eurozone, where a fall in house prices makes people, not banks, worse off. Also, he says that the Fed has an explicit mandate to safeguard the financial system, while this is not even mentioned as a secondary objective for the ECB. - davidcg, on 03/27/2008, -5/+15I'm in agreement with you about this like this getting my extremely angry, id digg you up more if I could. Personally, the thing that really pisses me off lately are the two recent nuclear weapon mishaps. But that aside, this current action by bush is just another item to add to the list of reasons of impeachment. He shouldn't be allowed to just give company's any amount of money to "save" them and pay directly out of the Federal Reserve whenever and however he wants.
- Condemned, on 03/27/2008, -2/+12JP Morgan bailed out the government in 1896 (or somewhere around there)...
- ambiguus, on 03/27/2008, -14/+23While a move I don't agree with, I'm not quite sure calling it a bribe is accurate.
The money was not given to them to encourage them to buy the company, it was used more as an insurance (backing) for them to buy the company. It may be a privileged loan with no intent to pay back, but I'm not quite sure that constitutes a bribe. Shadey and risky to the taxpayer either way. - Rsulliv1, on 03/27/2008, -2/+11I believe that Bush has done more than Clinton to deserve an impeachment.
- breadfred, on 03/27/2008, -0/+9Yeah right. That's why used the same handle. I bet you a lot of people here have more than 1 handle and comment and digg their own stories, but bigtallmofo just wanted to comment on an article he found. I cannot for the life of me envisage how that is lame.
- inactive, on 03/27/2008, -9/+17I would love nothing more than seeing the Bush Administration go out in disgrace and shame.
- StormCommander, on 03/27/2008, -9/+17The Central Bank needs to come to an end like the one before it.
- OrangeCrush, on 03/27/2008, -0/+8Part of the Fed's reason for being is to be a "lender of last resort" when the failure of a depository institution (or another company in extenuating circumstances) would spell disaster. If Bear went bust, so would the counterparty agreements. The credit market is pretty frozen right now. It would seize up completely, cause the failure of major investing institutions and quite possibly throw the whole world into a new great depression. This would be bad for everyone. It's understandable wanting the bigwigs on Wall Street to be punished for their bad choices. But the truth is, far far more ordinary people just trying to get by would end up suffering much more.
- chadu, on 03/27/2008, -6/+14Socialized Capitalism
- tj111, on 03/27/2008, -1/+9It'd be a dream come true.
- jaxter2010, on 06/17/2009, -0/+8I am curious as to why I keep reading comments from all these people who think that its white collar billionaires getting bailed out. Middle class citizens put their retirement funds in to plans, which are then invested for them in the market. They are losing on this as well.
- ExRe, on 03/27/2008, -3/+11So I can give a hooker a "privileged loan" and it wouldn't be illegal?
- jmpeagle, on 03/27/2008, -3/+11uh...they hold the capital for other companies. Those companies would have lost their capital and would have been forced to cause a stock market crash.
"Bear Stearns is the second-largest prime brokerage firm in the country, with a 21 percent market share. As part of the prime brokerage business, hedge funds would use their stock holdings and borrow money, many times the value of their stock from Bear Stearns, and then redeploy it in the markets. Bear Stearns, thanks to its stellar credit rating, could easily raise gobs of money that it in turn loaned to hedge funds. They had built up a portfolio of around $136 billion of these assets. (I am not sure how they are really assets, but maybe I am just way too skeptical.)
In the days leading up to the financial crisis, the hedge funds had started to get worried about the credit worthiness of Bear Stearns and decided to pull their money. Now had Bear Stearns gone bankrupt, there would be a lot of hedge funds out there being forced to dump their stocks into the market just to meet their obligations. In other words, the downward spiral that would have ensued would have become a vortex that would have sucked down entire financial markets."
http://gigaom.com/2008/03/17/bear-stearns-bail-out ... - Walmac, on 03/27/2008, -0/+7Ummmm....you must have been a pretty terrible analyst at your Investment bank because bondholders have the most senior claim on assets so they wouldn't have lost everything. EQUITY investors would have because they are the last in the chain after preferred stockholders during liquidation proceedings.
Arguing credentials mean little over the Internet when people like you can make up whatever they want - reed311, on 03/27/2008, -5/+12Congratulations. I was actually just about to email you and ask you who you voted for. Thanks for saving me the time.
- inactive, on 03/27/2008, -3/+10i'm shaking with laughter at how stupid you are. BS was about to go illiquid which is ~= to bankrupt for a financial firm. This would have caused a chain reaction killing wall street and sending the market into a panic. The fed saved your ass. (here i assume that you are not 8 years old and have some investments, which may be a bit much)
- ntwrkguy, on 03/27/2008, -0/+7but pushing a thumbs up button is a lot easier...
- MellerTime, on 03/27/2008, -2/+9Please, don't remind me. Sometimes, late at night, I can still hear the screaming...
- inactive, on 03/27/2008, -1/+7that would be wrong. the fed makes its own money, it isn't taxpayer funded.
- marksven, on 03/27/2008, -1/+7How does this make it legal? Is the Federal Reserve is now free to break the terms of the law in order to speculate with what is essentially taxpayer money and bail out investment banks? I don't think so.
- factdigger, on 03/27/2008, -1/+7This is a classic example of privatize the profits and socialize the losses!
- rromanchuk, on 03/27/2008, -1/+7"But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost." (the best economists in the last quarter century. )
http://www.federalreserve.gov/boardDocs/speeches/2 ... - quomen, on 03/27/2008, -9/+15Seconded.
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