TDS on Bear Stearns: Government Bailout? or "Free-Market Reinvigorment"?
Jon Stewart and Aasif Mandvi discuss the Fed's recent bailout "currency-supply, free-market re-invigorment" of Bear Stearns.
Download | play 
Download | play
The USA Today (as Colbert would call it) chimes in with some rosy predictions and observations.
Red flags in Bear Stearns' collapse:
If the U.S. economy were a car, all of its warning lights would be flashing red. The breathtaking collapse of investment bank Bear Stearns over the weekend is the latest — and perhaps the most alarming — indicator to flash on the economy's dashboard.
The story of Bear Stearns isn't just a saga of a spectacular Wall Street failure. The company's failure signals far deeper problems with the nation's economy and raises questions about the consequences of Bear Stearns' problems for ordinary Americans.
When Bear Stears was sinking, the Fed threw them a $30 billion lifeline -- one we're expected to pay for. When NOLA was sinking, Bush spared them 10.5. Tells you where the priorities lie, huh?
You're the cog, we're the wheel, get over it -
/Greenspam
Froomkin:
""As with the war in Afghanistan, the Iraqi war aftermath, the Hurricane Katrina disaster and current efforts at Mideast peace, investors are concerned that the president is responding too late and with inadequate understanding, resources and creativity.""
http://www.washingtonpost.com/wp-dyn/content/blog/2008/03/18/BL200803180...
George Bush's first committment to the tsunami recovery was $300 million!! LOLOL!
He then upped it when he got publicly ridiculed.
Is ‘Conservative Economics’ Bankrupt? Is Bear Stearns SH*T in the Woods?
How come no one is discussing Bear Stearns CEO Alan Schwartz's $83 Million Jackpot?
What is it going to take to stop the Bush onslaught?
Vidal: Economic collapse.
We are too deeply in debt.
We can’t service the debt, or so my financial friends tell me, that’s paying the
interest on the Treasury bonds, particularly to the foreign countries
that have been financing us. I think the Chinese will say the hell
with you and pull their money out of the United States. That’s the
end of our wars.
http://hubble.quantumlinux.com/pipermail/hnet-bigmindmedia.com/2006-Augu...
People who believe in a "free" market are Cray-zee! The repugs (especially...but with the help of the corporate-loving dems) have done everything they can to weaken the government by restricting tax revenue while "privatizing" our society as much as they can. It has always been about maintaining power for a few at the expense of the majority. And because the majority has allowed it (even supported it), they get what they deserve. A pox on capitalism and its apologists, sez I.
one evil empire down.......... one to go.
As outrageous as it seems on the surface, the Fed really had no choice in the Bear Stearns bailout. If Bear Stearns were to truly collapse, it would signal a major upheaval in the liquidity of cash assets that would extend far beyond Wall Street.
It would definitely affect consumers at every income level because it would cause the whole banking community to circle its wagons and create such tight controls that could choke whatever dynamic movement our economy has left. Yea to Bush for being the biggest leadership disaster and friend of those who hate America for our economic slide! Without him, Bear Stearns wouldn't be where they are!
Corporate Welfare Queens = Wall Street
Bottom line is this BS bailout prevented a crash-market sell off-bank runs.
So what does Bush do?
Bailout the markets so the illusion everything is fine continues until he can high tail it out of D.C. next year for the brown brown grass of home.
"Privatize the profits, socialize the losses."
This is the mantra of predatory capitalism.
Thus we get KBR mercenaries that cost 3x as much as a regular soldier.
Thus we get the gaming of the energy industry.
Thus we get deregulation and the collapse of the mortgage market.
Thus we get school vouchers, and no accountability for students who actually do worse then in public schools.
Thus we get backroom deals of public funds shifted to support religious agendas.
When you think of neo-cons, think of CON ARTISTS.
Bush sounds like a commie. I could use a federal bail out.
greg white @ 12:
You are SO right.
Seems sometimes humanity is getting some signal to "annihilate ourselves".
Let us count the ways we're succeeding.
weldon @ 16:
You won't be laughing next year.
The purpose of warfare is to economically bankrupt your enemy into submission. Guns, tanks, bombs, and bullets are just tools to bring about that result.
I think it is time for Bushco to seek exile in Argentina.
national disgrace.
hmmmmmmmmmmmmmm........... interesting
What is it going to take to stop the Bush onslaught?
Vidal: Economic collapse.
We are too deeply in debt.
We can’t service the debt, or so my financial friends tell me, that’s paying the
interest on the Treasury bonds, particularly to the foreign countries
that have been financing us. I think the Chinese will say the hell
with you and pull their money out of the United States. That’s the
end of our wars.
The S-chip bill was turned down last year because it would have been too expensive. How much $$ would it have required?
What is the economy anyway? I don't think the economy is heading south, I think our values as a country are going south. We always talk about being the richest nation in the world and here we are arguing about stock. Mutual funds are still the way to go. Random thoughts.
Debt Free Hispanic @ 22:
Once again, by cutting interest rates, the Fed rides to the rescue of the market bubble.
L.A. Confidential @ 17:
personally, I'm stoked. I'm gonna buy a fantastic house for dirt cheap, even though I got shit credit - because I'm in an incredibly safe industry, and I'm making myself valuable in one of those "if he got hit by a bus we'd all be screwed" sort of ways.
but I feel sorry for all the rest of you, and I'm incredibly annoyed that someone like me is going to be so well-positioned by this time next year.
but ya. I plan on laughing late next year when I get my broke neighbor's house for dirt cheap, from his broke banker.
cramer has lost his mind.
And Bush's madness is now hurting everyone in America in a way they can feel.
burnt @ 24:
Yeah thats what they all say. Then never to to be heard from again.
I have tried extremely hard to believe that there wasn't a group of folks out there who are so calculatingly cold that they would watch the slow, tortuous death of our country. Adding insult to that slow death, is the knowledge that the very same group of power-brokers who are trashing this country, sit around regaling in stories and face-reddening laughter at the idiot they put in charge to ensure it happened. Knowing full well Americans would vote for him and do nothing about their mistake.
Clearly there has never been a dumber, more disgraceful national leader in all of history. I beg anyone to name two that are dumber and more disgraceful than the current bag of feces in command.
Thinking about this situation and the Big One in 29. That happened because people were buying stock with borrowed money, and if the stock didn't go up they couldn't pay the loan. This is happening because if the value of the underlying real estate doesn't hold up, the people who sold the debt that it might be hidden in need to pay more interest or even give the buyers their money back (that's what happened at BS).
So both times it was based on an assumption of prices never going down. And both times it was a pervasive racket that dragged down investments that weren't even related to it-- the risk of one stupid idea was diluted to the entire market.
L.A. Confidential @ 26:
Agreed and with higher and higher inflation coming down the pipe it will make things a lot more difficult for everyone. We are turning into a third world country economically and only a few seem to care.
Some Wall St banks seen riskier than poor countries
"You could say Lehman is riskier than Nigeria," one trader said, asking not to be named. "But it's not a trade or a comparison people often try to make."
http://news.yahoo.com/s/nm/20080318/bs_nm/emerging_wallstreet_dc;_ylt=Ao...
Charlie Rose had a great interview last night with Andrew Ross Sorkin, who explained much of what the MSM fails to touch.
His second interview was also on the Bear Stearns bailout, but I have to say that Lawrence Summers seemed much like a damage control agent compared to Sorkin's straight forward presentation.
c. atrox @ 7:
you said it, anyone who falls for the "free" market mantra has been snookered.
the owners game the system for their advantage, there is no "even playing field", as that is anathema to capitalism.
the owners and market fundamentalists don't want government intervention... unless it benefits them. then, by all means, intervene.
The Iraqi invasion and occupation has run for a full 5 years now and cost just about 500 billion dollars.
In less than a week the Fed has dumped just under half that amount, a quarter trillion dollars, at the financial markets and the bail-out of Bear Stearns.
Sometimes money doesn't talk, it SCREAMS.
~Nyc
PS: This isn't an impending recession that we're headed for, been in one already for practically the entire period Busch has been in office, this is another Depression that's headed our way.
Brace yourselves.
Bush worked faster to bailout Walstreet than the people affected by the Katrina disaster.
When will this guy leave us?
Poppy Bush is the one who started this domino effect. Why is this not all over the media?
Carlyle Capital Corporation Unable To Reach Agreement With Lenders; Lenders Likely to Take Possession of Remaining Assets
New York, NY – Carlyle Capital Corporation Limited (Euronext Amsterdam ticker symbol: CCC; ISIN: GG00B1VYV826) (the Company) today announced that, although it has been working diligently with its lenders, the Company has not been able to reach a mutually beneficial agreement to stabilize its financing. The Company expects that its lenders will promptly take possession of substantially all of the Company’s remaining assets.
The only assets held in the Company’s portfolio as of today are U.S. government agency AAA-rated residential mortgage-backed securities (RMBS). During the last seven business days, the Company received margin calls in excess of $400 million. As the Company was unable to pay these margin calls, its lenders proceeded to foreclose on the RMBS collateral. In total, through March 12, the Company has defaulted on approximately $16.6 billion of its indebtedness. The remaining indebtedness is expected soon to go into default.
The Company explored a variety of proposals with its lenders in an attempt to refinance its portfolio on sustainable terms. The Carlyle Group participated actively in those negotiations and was prepared to provide substantial additional capital if a successful refinancing could be achieved. Negotiations deteriorated late on March 12 when, among other things, the pricing service utilized by certain lenders reported a drop in the value of the RMBS collateral that is expected to result in additional margin calls tomorrow of approximately $97.5 million.
Overall, it has become apparent to the Company that the basis on which lenders are willing to provide financing against the Company’s collateral has changed so substantially that a successful refinancing is not possible.
* * * *
About Carlyle Capital Corporation
The Company is a Guernsey investment company that was formed on August 29, 2006 and completed its initial offering in July 2007. Carlyle Investment Management L.L.C. (“CIM”) manages the Company pursuant to a management agreement. CIM is a registered investment adviser under the U.S. Investment Advisers Act of 1940 and is an affiliate of The Carlyle Group.
This press release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or other securities of Carlyle Capital Corporation Limited. Certain of the information contained in this press release represents or is based upon forward looking statements or information. Forward looking statements are inherently uncertain, and changing factors, such as those affecting the markets generally, or those affecting particular industries or issuers, may cause events or results to differ from those discussed. Therefore, undue reliance should not be placed on such statements or the conclusions drawn therefrom, which in no event shall be construed as a guarantee of future performance, results or courses of action. The Class B shares and the related restricted depository shares of the Company are subject to a number of ownership and transfer restrictions, including restrictions that limit the ability of U.S. persons to acquire or hold such securities.
RMac @ 27:
Why 2? How about 1?
Soon, we will finally know what our grand parents
experienced during the depression in the 1930s...
and your flat screen t.v.s, $30,000 SUVs, video
game systems and $700,000 home won't be
worth dog shit. Sooner or later, you can kiss
your paycheck bye bye too because the corps
and companies you work for won't be able to
afford you any longer.
RE:
Dustin de Wynde Says:
The Iraqi invasion and occupation has run for a full 5 years now and cost just about 500 billion dollars.
In less than a week the Fed has dumped just under half that amount, a quarter trillion dollars, at the financial markets and the bail-out of Bear Stearns.
Sometimes money doesn’t talk, it SCREAMS.
~Nyc
PS: This isn’t an impending recession that we’re headed for, been in one already for practically the entire period Busch has been in office, this is another Depression that’s headed our way.
Brace yourselves.
THAT'S WORTH REPEATING!
PS: This isn’t an impending recession that we’re headed for, been in one already for practically the entire period Busch has been in office, this is another Depression that’s headed our way.
AMEAN
G.O.P.ping BUSH ECONOMIC DEPRESSION SINCE 2001 !!!!!!!!!!!!
where's Ayn Rand when you need her?
weldon @ 16:
I didn't know that there was a 110+ storey brick building he could jump off of.
RE: 39 hussein it was a bailout Says:
where’s Ayn Rand when you need her?
AYN RAND IS DEAD AND ROTTEN!
We need a new government agency called the department of blame bush. anytime things are not going right in your life you can just blame government, well bush..
Ayn Rand? Yuck.
The usa is phucked financially. Who voted that monkey and his terrorizing buddy cheney into power anyways? Outside N. america you don't have very many allies anymore. GL with that. I think a good chunk of canadians are getting sick of the BS too. Something about invading sovereign nations, commiting murder and t0rture that turns the people off. Getting it yet?
Noam Chomsky recently wrote that America thinks that it owns the world. That is definitely the view of the neoconized Bush administration. But the fact of the matter is that the US owes the world. The US "superpower" cannot even finance its own domestic operations, much less its gratuitous wars except via the kindness of foreigners to lend it money that cannot be repaid.
The US will never repay the loans. The American economy has been devastated by offshoring, by foreign competition, and by the importation of foreigners on work visas, while it holds to a free trade ideology that benefits corporate fat cats and shareholders at the expense of American labor. The dollar is failing in its role as reserve currency and will soon be abandoned.
When the dollar ceases to be the reserve currency, the US will no longer be able to pay its bills by borrowing more from foreigners.
I sometimes wonder if the bankrupt "superpower" will be able to scrape together the resources to bring home the troops stationed in its hundreds of bases overseas, or whether they will just be abandoned.
Everybody says the economy is tanking. How is it tanking if the Bear Stearns CEO Alan Schwartz pulled down $35 million in 2007 in salary and options from Bear Stearns alone? Explain to me how the economy is tanking when the richest 1% of our country gained 23% in 2007 alone? You all are barking up the wrong tree. The economy is not tanking. The ruling class is taking it for a ride. You think JPMorgan Chase is worried about acquiring Bear Stearns at less than 10% of its net worth. (The actual office buildings Bear Stearns owns are worth many times what JPMorgan paid for ownership of all its operations).
When Chevron has an annual report that shows significant losses and Warren Buffett has too tighten his belt then the economy would be in a down turn, but what is really happening is the economy is being played with to the benefit of a very small percentage of our population...and they are doing very, very well....like Alan Schwartz.
GB @ 45:
Finally, someone gets it.
GOP economic mantra: Tax cuts and bailouts for the corporations, middle class America you're on your own.
i have faith in the economy
i have faith that within 6 months i will be moving into my parents basement
thank you
If the U.S. economy were a car, all of its warning lights would be flashing red.
NO! They would have been warning lights flashing the past 7 years while the bush administration ignored them because their BFF the investment bankers kept telling them those didn't mean anything. This is more like a wheel coming off.
hussein it was a bailout @ 39:
Umm, it was Ayn Rand's protege, (and maybe ex-boyfriend), MSNBC's Andrea Mitchell's now husband, one Alan Greenspan, that was the driving engine of these failed economic policies through his long-term stewardship of the Fed that have gotten us into this mess.
Do we really want to add Rand into the mix too?
Never mind that she's already dead.
Come to think of it, this cast of rogues, and this situation of global economic collapse reads like a chapter from one of her novels when everything is falling apart due to failed government policies, with the irony being that the real life bad guys that created this real-world mess would be the ones that are the heroes in Rand's books.
Where's Alanis Morrisette when you need her?
~Nyc
To quote James Carvelle, (sort of)...
"It's the war, Stupid."
Of course it tells us where the priorities lie. New Orleans is not at all close the foundation that's holding up the house of cards. Banks and their central bank, the Fed, is a foundation holding up the house of cards.
I don't see the point of complaining about it now, because exactly nothing can be done about it. I don't agree with the system of bail outs, but it's either live with that, or allow the economy to implode - like seriously implode. You seriously want it to implode, while espousing a no government intervention mantra when we haven't followed that piece of advice since the Fed was formed? Get real.
More Bush economy news: Delta Airlines offering severance to 30,000 employees.
Ruthless People @ 53:
http://news.yahoo.com/s/ap/20080318/ap_on_bi_ge/delta_jobs
The clip is hilarious but the situation isn't. It certainly has by attention. Thats why I don't take financial advice from someone on TV that is not going to walk down the financial path with me.
Just for the record, Jim Cramer should not be listened to for advice, not because he was wrong about this, but because he has been wrong on many occasions. When he was a trader, he screamed at the Fed to lower rates on almost a daily basis, lowering of which has the effect of diluting the value of the dollar and making the problem worse, because more money is printed when rates go down, thus precipitating further malinvestments that themselves are going to be found to be unprofitable later on down the road. This is exactly how the housing crisis was created. The Fed lowered rates down to 1%(!!!) in 2003 and held it there for a long time. The new money that was printed went into the housing industry. Many new houses were built, and after they were built, appreciated in cash value very fast, because if newly created money continually gets pumped into an industry, prices are going to rise on a continual basis. When this happens, people and investors will get attracted to that opportunity, and precious scarce resources will get directed to housing and investments backed by housing.
But this was an illusory prosperity. The only way for the prices in housing and the investments depending on them, to continually rise, is if the Fed maintained a low rate of 1% for many years. But keeping the rate at such a low rate will eventually lead to rising prices for OTHER goods, once that new money gets spent and respent away and into the rest of the economy. The Fed at some point is forced to raise rates again, stopping the rising prices from becoming noticable in their corrupt CPI indicator.
The result of this raising of interest rates was that the source for the continually rising prices in housing and in investments backed by housing, disappeared. The Fed raised rates and in 2005 the first signs started to show that the new housing and mortgages and all the mortgage backed securities, were found to be without buyers, at least at the prices that prevailed at the time. The result is that the housing bubble burst, AND the bubble that was SUPPOSED to have burst in the early decade is bursting as well, AND the bubble that was supposed to have burst during the NASDAQ bubble in the late 90's is bursting too. These earlier bubbles were signs that the whole economy needed a correction. These bubbles were supposed to spread into the rest of the economy, but didn't because of the Fed printing new money to stop it from spreading.
The result is that we are now facing a crisis that has triple the power. The economy was supposed to have a recession after the 1987 stock market crash, but didn't. To put this into perspective, ALL the buildings, investments, and infrastructure creations since 1987 have been malinvestments, meaning they were not supposed to have been made. This is exactly what happened in the 1920's. The Fed created bubble of the "roaring twenties" lasted around ten years, before it burst and the economy corrected itself (although it was hampered by FDR).
Now it has been 2008 - 1987 = 21 years of a bubble economy. Not only is this an American crisis, but a world crisis.
Now you see how big of a deal all this is.
For almost an entire generation, the country has lived a lavish consumer-driven lifestyle, instead of a long-term, saving, rational lifestyle. The chickens are going to come home to roost. And it's going to be very difficult for everyone.
GB is correct, which just begs the question "when will there be a revolution?" As a society we need to take back what that 1% has stolen over the years. The SOB that runs Blackwater would be a good place to start. I know it will never happen, but I wish I could live to see the day Bush, Cheney, and all who have benefited from their rule were convicted of their crimes and given the sentences they truly deserve.
Listened to the latest from JS... Good grief, I don't even know where to begin... Apparently this is the nuts and bolts events that occur when a nations economy starts to rip apart at the seams.... Apparently it boils down to 'could never make a mistake let alone fail in judgment in a million years financial giants' in fact... failing... Big shot financial brains 'who could never get it wrong because, well, they have big brains, that's why they get the big bucks'.... gettin it wrong... Massively wrong wrong wrong..
A couple of points I can recall, JS's comments regarding Bush, his presidency and his heheh stewardship of this nation... His verdict on chimpboy??? "You suuuccckk".... Couldn't have put it better... says it all for me about numbnuts...
As regards the big brain guru's of this system euphemistically called either 'free market capatalism' if ya love it or 'predatory capitalism' if you're getting screwed by it... and as regurgitated by T.V. financial mouthpiece's such as Jim Kramer.... Speaking about the Bear Sterns fiasco in this instance literally days, maybe only hours before the feces hit the occillator... "Don't take your money out of Bear... no no no...Don't be silly"!!!! And I guess the subtext is, don't be silly, be STUPID!!... Since what has happened since perfectly encapsulates Stewarts other analogy... The night out with $600.00 in pocket waking up the next morning with only subway fare... err except ya didn't even get the pleasure of the night out... priceless as the commercial says... And this is the supposed system that will lead the world to a brighter better future????? Riiiggghhttt, and P.T. Barnum is having a good laff somewhere over the rainbow right this minute... A nation full of rubes falling for the same tiredass get rich quick scheme used for....well apparently forever to fleece people of their hard earned ducets....
I dunno folks this kind of shit is one of the many many reasons I never have tried to play that stockmarket game. Not that this debachle won't bite me in the ass like everyone else anyway...
Still I am left wondering, who's really the rube here, me because I wouldn't ever go near the game? Or the too smart by half day trader who just lost his ass? And who gets to pay the freight on all this besides you, me and every other tax payer? And what of the Alan Schwartz's with his 83 mil walk away pocket money, and other CEO's of the world with their well heeled golden parachutes? Do they just 'all' waltz away scot free, shoulders shrugging while the political system jacks the rest of us up to clean up their financial clusterfuck? Someone needs to pay thru the nose for this shit this time.. Someone other than you and me.
JD
Worse than that. If you are poor, you are undeserving of a handout, if you are rich...well.
Note, globally the big I banks handed out bonuses collectively worth 39 billion last year. Yes, billion. Fuck them.
As a taxpayer I would rathe r have seen that 30 billion go to bear Sterns' mortagees free and clear, let BS fail and throw the company's officers and directors in jail for their crimes. The only people who benefited were the crooks who ran the company and the mortgage scams. Not a penny to the people who will lose their homes, and the stock holders took a royal fucking, too. Typical life in Bush World: The bads guys, and only the bad guys, win.
Another casualty of the Bush Policy.
The WORLD was worse for the WORLD in the most part under the Bush Regime.
The Pelosi for personal and political profit and the off-the-table is becoming increasingly responsible for allowing the BUSH/CHENEY continue under their descretion.
The desire to NOT impeach and put an end to this madness is Clearly frivilous and a political manuevering on the part of the democratic congress leadership.
AMERICA wake up.
Drew @ 56:
no doubt
i'll take it to the next level, too.
none of the financial advisors, business experts, wall street wiseguys, unrestrained-capitalism cheerleaders, wealth prognosticators, etc. should be listened to, ever. they are corrupt, compromised, short-sighted, and true-believers (see, woefully ignorant) of a failed economic theory.
I guess the billions of dollars in bonuses handed out on Wall Street just a few months ago were a last money-grab before the ship went down. I am getting a better understanding of the term "capitalist pig" every day.
This just announced, the FCC has open an investigation into trading of Bear Sterns leading up to sundays buyout by JP Morgan.
Stewart said it all: "You s---u----c--k.
I liked Baltic Avenue, also. So people might get back $600 they overpaid in income tax; money the government has been using for free, and he makes it sound like a gift, from HIM (or something). He really has no understanding. Diagnosis: braindead and irrelevant.
With my $600 I'm buying imported Italian shoes. That oughta jump start the American economy, and save everyone's home.
PS My friend is buying a Prada bag, but $600 isn't enough; just a downpayment. (wink)
The root of the subprime-financial crisis stem from the lack of government oversight. With weak oversight policy, the run-away-mortgage BROKERS for the subprime population was allowed to fabricate income, under the "STATED INCOME" enabling sub-prime barrowers qualify for loans. Stated income will indicate at the high-end of the income bracket based on "STATED" occupation. THIS IS PROBLEM NUMBER ONE.
The sub-prime brokers packages these mortgages and sells it at a discount to larger financial institution.
In the mean-time, LOAN BROKERS and loan officers have already been compensated for these SUB-PRIME packages.
The underwriters that bought these sub-prime package loans INCREASE their portfolios.... create an artificial Robust financial business. THE CEO's get bonus for these "successes" when the stock price goes up. This effort is the CEO's justification for such HUGE COMPENSATION package.
Once the CEO's benefit packages and transaction has been EXECUTED, the CEO (for better lack of words) takes the money and RUN and the FEDERAL TREASURY bails-out the flailing financial institution.
The TAXPAYERS end-up with the bill. IN ESSENCE THE CONSUMERS, TAXPAYERS (YOU & I) END-UP GETTING FINANCIALLY HIT THREE TIMES. The economic health is being assaulted by lower dollar, devalued housing prices, and crumbling infrastructures and an ultimate falling public services (i.e. in domestic issue in areas of schools, police protection, and healthcare).
1. Through the scenerio above
2. lowered prices for our assets
3. Higher national debts that the taxpayer will end-up paying for.
AMERICA MUST WAKE-UP
Demand IMPEACHMENT....Demand Accountability....
WE are getting swindled by those WE hired as our "GATE-KEEPERS".
Woopsie Daisy! @ 20:
No. It is how wars start. Every world war...going back to the Roman Empire, has begun with the collapse of a major country's currency.
Do you think the U.S. is just going to sit back and let the Chinese do that? War in the Middle East...yeah...that'll be a sidebar.
The bankers owe the baby-boomers quite a bit of money. In the next few years, as the boomers retired, the bankers were supposed to transfer a huge amount of wealth to the boomers. All of the boomers retirement money is tied up in IRAs and real estate.
If the bankers screw up the financial markets and banks then they do not have to pay the boomers their retirement money. Its kind of like when a soldier shoots himself in the foot to get out of a war.
The really powerful bankers can survive the banking institutions collapsing; but, they cannot survive having to actually pay back all that money to the baby-boomers. They can rebuild the financial institutions; but, if the money is transfered to the retirees then the money is GONE!!!
baltic avenue...priceless.
Not once in this whole list of comments did anyone say anything about the Fed being unconstitutional. You want to know the real picture to the U.S.'s economic troubles? It's simple: Congress relinquished their duty of monitoring the U.S.'s money supply to the Fed, which isn't even part of the Executive, Legislative, or Judicial branches.
tl:dr version: central economic planning doesn't work when your elected representatives aren't at the helm.
JS has one great group of writers. Very funny stuff. GW is an instant joke waiting to be written anyway.
Joe O. @ 29:
We are seeing the Merchant Banks that make up the core (owners) of the Federal Reserve Bank collapsing,
this is something never seen before and is ominous, prob 1929 style.
Chuck @ 71:
This is the next part of the Bear Stearns disaster that hasn't really come to light yet...
Bear Stearns deliberately focused on selling CDOs called "toxics" to pensions funds all over the country. CDOs are Collateralized Debt Obligations... translation... packages of bad subprime debt done though their Hedge Funds.
In 2006 alone they sold $503 Billion dollars worth of these CDOs to pension funds and when their stock dropped to $2 dollars a share... a couple of trillion dollars of pension fund money went poof!... lots of little old ladies and boomers just saw the end of their pension checks!
Aside from the futility and wasted effort as far as addressing or mitigating any financial problems we are embroiled in, has anyone thought or written about the fact that they are creating a huge liability that the taxpayers are ultimately responsible for? It goes like this.
The FED is a private corporate business with private, unknown shareholders. Many or all do not even reside in the US. They are not pledging or using their own assets or reserves nor are they creating a liability on their own non-public, non-published, and cleverly hidden corporate balance sheet. They flat-out print all this horrific largess and then casually shift the subsequent debt charge to the US taxpayer. They do this through a federal government liability entry that includes both the printing and distribution costs, as well as the loan proceeds paid out to the same greedy deadbeats and crooks that created the financial problems. Little, by actual count, goes to the private individuals who were financially injured by these greedy deadbeats and crooks. But the banks get well by being able to exchange the bad paper they created to the US taxpayer for the same cash the FED created. To top it off, they then begin to charge us interest on these loans they created. The loans are so large, they will never be able to be paid off, but the interest will continue to accrue to these unknown FED shareholders, probably forever.
The M-3 dilution effect caused by these additional dollars that the FED created drives up the inflation penalty to all of us and affects our standard of living, as well as adding to our individual portion of the increasing federal debt liability.
I would also be willing to bet that, due to some secret arrangement they have negotiated in the past, the interest income paid to the FED share holders is never subject to any US corporate or personal tax. Congress and the Executive branch roll over and don't have the cojones to challenge them and the taxpayer loses at least three ways. We are such saps to continue to agree to this monumental stupidity. The FED shareholders must laugh at us all the way to the nearest foreign bank where they exchange their interest earnings out of dollars and into gold or an alternate stable currency because of the depreciating dollar. Sadly, they have been so amused by similar ploys since 1913 when we let them take over our national financial management.
nomoreclintonorbush @ 52:
so it implodes, and something better rise from the ashes.
maybe even the US government taking back control of the US economy maybe.
on the very very late late night/early morning news on abc yesterday/today, i was "educated" about the bear-stearns debacle -- they compared it (with a clip) to the movie "it's a wonderful life", asserting that bear-stearns is just like the savings and loan in that movie and that there is really no problem with bear-stearns, the problem is that investors saw other investors taking out their money and did likewise, causing bear-stearns to fail. if the investors hadn't caused a panic, everything would be just ducky.
it's not the deregulated financial markets that are to blame for the failure of bear-stearns, it's the little guy who, through stupidity, caused the failure of a major financial institution.
glad i got the lowdown from abc!
Rasputin @ 76:
brings back memories of Robert Maxwell and the Mirror group collapse, and their raided pension fund.
karen marie @ 79:
Nothing but clap trap from the manipultaed media who are in the back pockets of both government and the banks. I guess if you tell a lie long enough, eventually to many minds it becomes truth. The sad fact, is that the American people are just now waking up to the lie and those cullpable for this financial mess should be run out of town on a rail after being tarred and feathered.
I'm sure glad they didn't privatize Social Security.
Not that it will make much difference.
This reminds me of the Oceanus disaster.....the country is literally disappearing beneath the waves while Captain Monkey-Boy Bush is sneaking away in the last life boat all the while his programmable bushbots are saying everything is fine. UNBELIEVABLE.
That "plastic house on Baltic Avenue" line was a classic.
ferrofluid Hussein @ 80:
Before Reagan, when America actually used to make things to sell and make profits and pay wages... only about 5% of the people in the US owned stock and the Ameican people were very pro-labor and had strong unions.
One of the largest segments of white collar crime was indeed raiding the pension funds of companies... all that money just sitting there. Too many of the Wall Streeters got caught and that was no fun at all. So the powers that be... the conservative God Fathers needed a way to turn America into being anti-labor and make it easier to get their hands on the capital... So enter Ronnie Raygun... and the gift of the 401K.
This made it easier to sell the conservative agenda to people who saw their retirements dependent on how well the market was doing... gave them a piece of the pie as it were, but in the beginning the stock market was a "value market"... but St. Ronnie also gave them "the bubble economy" and now we have seen one massive fleecing of Americans after another... whip up the greed quotient of the mob, inflate the price of assets beyond all comprehension, give easy deregulated credit terms and let the fleecing begin... until....POP!
If they leave our country broke and broke down - Who will be the global sherrif?
If you want to rule the world don't first you have to bring down the current rulers...
Is this the beginning of the end of the FED? Perhaps we really need a shinny new global reseave bank to match the burgioning global economy...
We have been fleeced and broken.
The crooks are singing 'I shot the sherrif' and LOL to the bank.
bear stearns couldn't go the backruptcy route because they would have to auction off the cdo's and putting a price on that bad paper would drag down the rest of wall street holding similar bad paper.
ferrofluid Hussein @ 78:
Or... can we dare to imagine... the US people taking back control of the US government.
Do any of you own a house?
I'm sorry. Let me rephrase that, do any of you own a PAYMENT BOOK on a house?
Because, if you do, and if you are paying interest on that loan, then in an indirect way, YOU ARE PART OF THE PROBLEM!
How many millions of people are either directly or indirectly invested with Bear Stearns, whose lives would be DEVASTATED by it's collapse?
We've allowed ourselves to create a debt-based society, where we cater to our desire for instant gratification, instead of working hard and saving up in order to achieve some long-term goal. We should not decry efforts to prop up that society... IF we think there's nothing wrong with it.
What I find interesting these days, is the efforts by the elites to convince us that the problem is with INDIVIDUALS... and not with the system itself.
The main reason that the Federal Reserve was created in the first place was to stop recessions and depressions.
How's that working out?
It is faulty logic to try and blame one person for our ills. President Bush is a small problem compared to the dysfunctional mechanisms that are inherently built into our economic system.
The Federal Reserve ASSUMES that it can simply solve our economic ills by loaning more money out to people. But it neglects to address the very real problem of what to do when there are no longer any "good risks" out there to loan the money to.
Awesome TV. TDS and Colbert make SNL look like your grandpa's Oldsmobile.
Whoever wrote that falling trader skit should get an award.
If I were the average American who's fighting to survive, I think right about now is the point where I'd decide to stop paying taxes.
You know, because the Iraq war and financial bail outs for greedy (and borderline corrupt) wall street firms are NOT where I'd want my tax money to be going.
Chuck @ 18:
Recent MSM propaganda suggests that Bush and Cheney have been acquiring property in Paraguay, because there are no extradition laws there...
Our economy is in far worse condition than anyone is willing to admit. The information is accessible, if anyone cares to look for it. Most of us don't want to know...
I've been watching this develop since the early 80s. Ronald Reagan's administration was the initial train wreck--the detritus of the wreck just continued down the track for a measurable amount of time, as is common in any wreck. Key players have grown their wealth from that moment on, while the rest of us have continued to see a deterioration of our earning power and our economic options. When will the detritus come to a dead stop?
As a nation we now
have a crumbling infrastructure with ever worsening roads, bridges and other man-
made items (dams, dikes, etc.)--and NO resources to change this reality.
have increasing costs of utilities and fuel, beyond even casual usage revisions.
have increasing costs of basic foodstuffs (bread is now better than $2.99 per loaf,
up from less than $2.00).
have fewer high-salary jobs and more service-sector, dead-end jobs.
have multiple major cities near or in bankruptcy.
have multiple school districts near or in bankruptcy.
have credit card debt exceeding our collective ability to pay.
have trade-deficits with countries we can't afford to irritate (especially one that is
currently committing atrocities in Tibet).
have candidates for our next presidency who have failed to acknowledge or address
the dire state of our economy.
have better than 20% of our GDP committed right off the top to paying the interest
on our national debt.
This is not an exhaustive list, by any measure, but I can tell you this: bend over and grab your ankles. Don't expect to be kissed first. Imagine the worst and then multiply that by a gazillion, because ours is now a world economy. When this thing blows, the fallout will be beyond anything any of us have ever imagined.
L.A. Confidential @ 5:
Do you really expect something different? If you haven't figuered it out by now, I doubt you ever will. Bend over, and don't expect a kiss!
Jeff @ 57:
You mean Blackstone?
Comments are closed on this entry