March 14, 2008

FLASH: Bear Stearns on verge of failure - emergency bailout by Fed underway. HP calls for the arrest of Bear CEO Alan Schwartz for false statements


Now things are getting interesting...

I'd like to see the crap toxic mortgage CDO's the US taxpayer via the New York Fed just bought.

Oh, wait, no, I really WOULDN'T like to see the crap toxic mortgage CDO's the US taxpayer just bought.

This one's not surprising, but what is amazing (and illegal) is that Bear's CEO Alan Schwartz put out these false and misleading statements this week:

Exhibit A: "Our balance sheet has not weakened at all," he said. "We don't see any pressure on our liquidity."

Exhibit B: "We don't see any pressure on our liquidity, let alone a liquidity crisis"

Exhibit C: "there is absolutely no truth to the rumors of liquidity problems that circulated today in the market"

COME ON MAINSTREAM MEDIA - GET ON THIS STORY LIKE FLIES ON SH*T. THE US TAXPAYER IS BEING ROBBED IN THE NIGHT AND YOU LAZY BUMS DO NOTHING!!!

JPMorgan Chase, With Federal Reserve Bank of NY, to Provide Funding to Bear Stearns

NEW YORK (AP) -- The federal government and JPMorgan Chase & Co. teamed up on a bailout of Bear Stearns Cos. on Friday, a last-ditch move to save the investment bank, which acknowledged its dire financial straits after a week of firm denials.

Bear Stearns lost half of its value within 30 minutes of the market open.

While it was not clear exactly how much money Chase would pump into Bear, a person familiar with the bailout, who spoke on condition of anonymity because the talks are private, said Chase may end up buying Bear Stearns outright.

73 comments:

Mark in San Diego said...

The "Disaster Du Jour". . .today Bear Stearns, tomorrow Citibank??? Where WILL this end. . .? look out below. . .

Anonymous said...

Know you can understand why the made such a move earlier this week...
This will be an interesting 28 days

Malcolm said...

Well, at least I got an answer to a question I posed on Wednesday: Why would BSC upgrade Thornberg when TMA was collapsing?

http://malcolmrant.blogspot.com/2008/03/riddle-me-this.html

Malcolm said...

The next question, of course, is why is Cramer minimizing this?

kilgore said...

Cramer blames the Fed!!!!

Somebody please cut that guy's tongue out!

Cramer was screaming at the top of his lungs that there IS NO HOUSING BUBBLE!!! in Nov 2006, but now Bernake is unfit to be the Fed Chairman???

How can Bernake be so incompetent when Cramer was so unaware that housing had troubles when the typical house was selling at 35 times earnings?

Seriously, there's $750 TRILLION of credit derivatives out there and nobody has the slightest clue what's going to happen next. The gravity of this situation is enormous and Paulson and Bernake know this more than anyone.

We are so screwed!

Anonymous said...

"Our balance sheet has not weakened at all," he said. "We don't see any pressure on our liquidity."

Technically true, balance sheets are just as bad as a few months ago and the problem is with solvency not liquidity.

keith said...

Check out drudgereport right now - it's BLAZING red - never seen the front page that dripped in blood before

JPMORGAN CHASE Funding BEAR STEARNS...
Cash 'significantly deteriorated'...

PAPER: Wall Street fears big bank is in trouble...
President Bush Plans Bullish Speech On Economy...
Dollar falls below Swiss franc...

STOCK ROLLERCOASTER ON BEAR STEARNS CASH FEAR

keith said...

Bush talking live right now about economic crash on TV and yahoo homepage link

He looks pissed and worried

Anonymous said...

How can Chase bail out Bear? Chase is in about the same situation as Bear. In my area- St. Louis, the #1 bank on foreclosures(published in the legal section of newspaper) is Chase. Followed by Wells-Fargo and Citigroup.

keith said...

Bush just said the $600 checks will offset the loss of equity in people's housing

HOOO HO HO HOOOO! MAN, THAT'S FUNNY!

DOPES said...

ARREST BERNANKE ALONG WITH THE REST OF THESE CLOWNS!!!

DOPES!!!

Anonymous said...

death of a whale.

Northern Rock redux.

Anonymous said...

All is well.nothing to see here.....Move along

Anonymous said...

I liked how he said "speculators" almost as if he was about to spit afterwards.

David said...

In general, the financial leadership in this country CANNOT be TRUSTED!

Time to hire some astute contrarians to review practive at the big boys on Wall Street.

Ed said...

How could this be? S&P said the credit crunch was over yesterday. Me so confused.

tater said...

Bush just said the $600 checks will offset the loss of equity in people's housing

Well, i'm baaaaaack!! Had some work to catch upon this week, so I was off the air, but I did do some checking. So, I get on this morning, and BANG!, Bear Stearns is going down the tubes. That was hard enough to digest.

....And, then, Bush said that the $600 "air" money coming to you soon, will offset your housing equity losses. I just puked!!

Anonymous said...

ABANDON ALL HOPE!

ALL CONFIDENCE IS LOST !

GOOD RIDDENCE!

Anonymous said...

I suspect that JPM is trying to save their own bacon here(with our dollars of course). They have much more to lose if BSC goes under.
Just like WaMu I'm sure the BSC bonuses won't be affected, maybe that's what he meant by no liquidity problems.

Anonymous said...

Keith- here's a much more appropriate picture for your BSC piece:

http://tinyurl.com/2f46wk

yes, safe for work.

Malcolm said...

Uncle Ben is talking at 1PM.

If it's anything like every other time he talks, the market will react by tanking. (even more)

Anonymous said...

Here's a novel concept... why don't they return the billions in bonuses they received last year for doing such a "great job." That will definitely inject some fluidity.

Anonymous said...

The failing of these organizations is not because of sub prime but mortgages in general. The impact it will have on real estate prices is already being felt by the increase in mortgage rates.

This is just the start of a 60 days full of problems and if you want to sell your house mark it down and dump it.

Mark in San Diego said...

Looks like Lehman Bros. may be next according to Marketwatch. . .one by one they fall. . .

Anonymous said...

THERE IS 550 TRILLION IN DERIVITIVES IN TAX AVOIDANCE BANKS OR TWENTY PLUS YEARS OF TOTAL WORLD PRODUCTIONS???..........

bearman said...

Bear Stearns is kaput..its over..going to zero. Bankrupt and out of business within a couple of months, the most.

Anonymous said...

this is what happened in Japan in the 1990s. the government arranged for the not completely screwed banks to bailout/buy the completely screwed banks, and the result was that almost all the banks were pretty much screwed. our banking system will be zombified with bad debt like Japan's if we keep this up. the scary thing is that with the plummeting dollar, it will cost the US government more to borrow, which could lead to the zombification of the government, esp. if it is buying/accepting as collateral/implicitly guaranteeing toxic CDOs. Risk is socialized!!!

Anonymous said...

Bear's Bonuses last year were in company stock; issued at $150 now at $32.

Anonymous said...

speaking of false statements:

Bernanke: There's No Housing Bubble to Go Bust

hahahahaha

Anonymous said...

Nobody should doubt HPers anymore we have been right all along

Anonymous said...

What happens when Bear Stearns defaults on the loan? Does US Fed take possession of of all cosigner and counter party assests of Chase bank and others?

US Federal Reserve will own half the assets in the country within 10 years. Maybe this was their plan all along?

Anonymous said...

HA HA


Blowfly SUCKS!

bearman said...

I'm just getting an enormous woody sitting back and watching the "creative" destructive forces of capitalism at work.
Nice work by the free-market conservative Bush administration,the Fed, banks,Wall St.,Kudlow, NAR, neocons and other assorted Goldilocks "experts".
You're doing a heckuva job,Georgie/Benny.

eric in vegas said...

"his is what happened in Japan in the 1990s"

Yep, the zombification of banks is already beginning but like we saw in Japan it can't go on forever. Not to mention the US isn't comprised of savers like Japan was back when their shit was going down.

Deflation Cometh said...

Housing Panic finally makes it to the mainstream media in the Midwest.

Builders leave house buyers empty handed

http://tinyurl.com/32mz9y

Anonymous said...

deny
deny
deny
deny
deny
admit
fail

bearman said...

looks like Benny and the Feds won't let natural market forces work and take out Bear Stearns.
They'll be working feverishly over the week making pledges of US taxpayer monies to have another firm
"buy" Bear Stearns a la Bank of America and Countrywide.
Of course, all in the name of providing confidence to the markets.
The whole game is a sham and fixed as America is rotting from within.

Markus Arelius said...

Obama aligns with Senator Chris Dodd on a housing gambler bailout plan, only he insists that it "is not a bailout".

New legislation would move stressed mortgages into 30 year fixed rate mortgages.

This just doesn't make sense.

http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080313006123&newsLang=en

Anonymous said...

One day after declaring the light at the end of the tunnel for the mortgage crisis, S&P employees woke to discover Bear Sterns insolvent. S&P lowered Bear's ratings to "BBB", which presumably stands for "Bear Bankruptcy Bailout". Two questions remain:

1.) If insolvency is enough to get you a B, do we have a bit of grade inflation?

2.) Does "C" stand for "deceased".

Anonymous said...

All I have to say is that this will even get more interesting in 28 days. That is when the loan expires. Bear claims thats enough time to regain the confidence of investors and consumers.

I dont think so. I think they are gone.

By the way Cramer is a fucking idiot. He wants the fed to bail out all the banks. What a freaking jerk. What about bailing out the US people, you freaking rat.

Dny

Anonymous said...

Kilgore,

You have it right. There is 750 trillion of derivatives out there.

I hated when people say that Bernanke doesnt know what is happening. Of course he knows, and he damn well knows he cant do shit about it. He's screwed and we're screwed.

As for the 750 trillion, these are worldwide derivatives and when shit hits the fan, the Euro is going to take it's beating as well. I would love to see that.

Dny

David said...

"'creative' destructive forces of capitalism at work."

The United States is by no means capitalistic. More like the destructive forces of a socialist, psuedo-capital, fiat currency, war machine.

Anonymous said...

Someone who was saying about JP Morgan being on the same boat as Bear. YOU ARE RIGHT.

JP Morgan might be in worst position than any other bank out there. They own over 50% of the derivatives out there (they inventented the damn thing). Only god will save them.

Dny

Anonymous said...

Oh,

Forgot to say, JPMorgan is picking up the little bit of valueable stuff that's left in Bear, like their headquarter's building in downtown NYC and whatever else has liquid value. Other than that, they are just a middle guy, take the money from the Fed and give it to Bear. Period.

Dny

Anonymous said...

bearman,

What about going bankrupt in 28 days when the loan from the fed is due. By then, most banks will have drained whats left of Bear. I just feel it for all those 13,500employees. What a shame.

I actually left my job about a year ago from one of the biggest banks. Im happy I did.

Dny

Anonymous said...

For you socialist morons out there, this is how capitalism is supposed to work. Bad companies go bankrupt and better ones come up to replace them. The only company that has been a part of the DOW since its inception is GE. The companies that gave out bad loans are going bankrupt like they're supposed to

SeattleMoose said...

What is especially galling is that it is all these financial "big boys" that beat the world over the head with NAFTA, WTO, and "FREE TRADE", "keep the government out of business", "let the market handle it/correct"....ad nauseum...now are begging for a bailout!!!

All the above rhetoric would be wheeled out and blasted at us by the MSM if Bear Stearns was owned by any of us "little people".

But now that one of the "big boys" is on the ropes....all of a sudden all the capitalistic rhetoric is abandoned!???

Wouldn't the model of capitalism that we get preached to us allow Bear Stearns to fail? I mean aren't they just like any other business that goes belly-up due to bad decisions/management?

Well, er...it is "different" with big Wall Street businesses. By "law", they can never fail.

The men behind the curtains are being exposed as the greedy pigs, crooks, and hypocrites that they really are....what a shock.

Anonymous said...

Nice work by the free-market conservative

Since when is it a free market with the Fed, Fannie Mae, Freddie Mac, FHA, HUD mortgage deductions and the rest of FDR's socialist banker bailout policies? I'm a capitalist and I love seeing these corrupt lenders going bankrupt. It's better than living in a Cuban slum.

If you think socialist lawmakers can prevent bubbles, why is Europe's housing bubble even bigger than America's? Houses in socialist Spain and Italy are so expensive that 40 year olds are living with their parents. You leftwing morons need to open your eyes to the rest of the world.

gaston said...

Right on schedule, the 3:30 "miracle" is kicking in again as the PPT makes its plays to skew the closing numbers.

Well, at least we have the best markets that money can buy...

Anonymous said...

Well, I called this light Black Friday yesterday and today at 6 AM, if you're paying attention on the comments. I also said that Tuesday's phoney rally would be followed soon by a huge nosedive.

Don't believe a word that comes out of the corrupt MSM, from this Bush administration, from Obama's empty speeches, and especially from the crooks on Wall Street. America is the land of crooks and the FBI is too busy gtrying to arrest escorts.

Enjoy; you voted for it TWICE, remember? And now you will put the last nail in the coffin by voting for Mr. Empty Suit Obama. A note to all the pathetic Gen Y's out there: please go get some real life experience that doesn't come from Google, Youtube, or MTV, before trying to look adult with an opinion.

Anonymous said...

Looking at the markets, it appears WaMu is next. If the Fed does one a day they can get most of this behind them by the end of next week!

Anonymous said...

Hey DOPES!, are you having fun yet? Where are the other trolls who were here cheering Tuesday's fake rally, which was nothing but another scam to fleece the sheep?

Meanwhile, our precious metals and foreign currencies are higher than Kudlow partying with Pablo Escobar!

We told you all what to do years ago: selling the cancer house, renting, getting out of toilet paper dollar, quit buying Chinese crap, stop watching Cramer and Kudlow and Maria Lend-Me-Your-Corporate-Jet Bartiromo. And we told you to read Schiff's book.

So f*ck you!

ItsOver said...

Fed is involved in junk economics by baling out rich investment banks on Wall St. and counterfeiting the US dollar. Today 3/6 month T-bills essentially at 1% as the dollar collapse continues.
The Americano, is indeed toasted, as someone here notes, while this once great country is rotting.
Last one out, turn off the lights!

Anonymous said...

bailout of BS is complete BS. BS is an INVESTMENT bank. not your local credit union.

They made poor investment decisions, let them suffer the consequences.

corvinus said...

Zombification of Banks:

Merrill Lich
Morganstein-ly
Goldman Sacula
UBDead
Citighoul

Happy Halloween!

Anonymous said...

Let me tell you what's going to happen next. The Fed (= secret society) will get together with all those Republican crooks from Wall Street, and they'll come up with a bunch of lies over the weekend, by saying that everything is fine, the financial institutions are solvent, "inflation is under control", bla bla bla. Then the market will jump on Monday, including the bankrupt Bear Sterns, to fleece the sheep who keeps thinking that we have reached a bottom. Then another huge nosedive follows the fake rally based on lies on Monday.

Cramer told his following of retards to buy Genentech this week. Today Genentech went down 4%. bwahahahaha

el dudelero said...

guys, what is your opinion on corporate bonds right now? talked to a wall street guy a couple of days ago raving about the big spreads to gov bonds....a lot of smart ppl on this board so i appreciate your input on this.

Anonymous said...

make way for the new AMERO instead of the dollar ...its all part of "their" BIG PLAN

Anonymous said...

No this cannot be!!!!

You guys are wrong because a realtor says the Raleigh market hit bottom! And we all know that realtors and the NAR are always right.

http://kasparteam.blogspot.com/2008/03/raleigh-cary-durham-nc-market-on.html

coke adds life said...

I home my new CDOs were marked to market before I bought them. Otherwise I may have to get testy.

Coke Out!

Pavlov's House said...

Your leaders have given you a week's rations and no shelter to help prepare you for the coming maelstrom.

They will not save you, you must save yourselves. Do what you can, do not rise suspicion, but plan accordingly.

The encirclement has been complete for sometime. Those inside the Kessel that realize they are encircled will get out by any means necessary, those that fail to realize will soon find out that their leaders are powerless to help them. The leaders have chosen to save the treasonous, villianous, sabotours and thieves. When the encircled finally realize what has happened and what awaits their fate, they will either lash out with vengence upon thier leaders or turn on themselves in cannibalistic barbarism.

The Battle of Sprawlingrad in RAGING!!!


PS: Decider No Election Index (DeNEI) 74% no election.

"Due to unforseenable and unprobablistic circumtanseses the election has been postponed indefinetenously....", the Decider 11/01/08.

Anonymous said...

"LAST DITCH EFFORT"?!!!

How can it be a last ditch effort to save this corrupt company when yesterday, things were just "dandy"..."no liquidity problems here" according to the CEO.

Please Bernanke!! Don't ever even attempt to question why people are pulling their cash out of accounts...Don't ever attempt to question why there is no confidence or trust in these propped up, corrupt markets that we used to call FREE!!

You are all LYING through your teeth to the public, and there will be no forgiveness!!

Tyrone said...

Keith,
MUST SEE blast from the past. Errrr... a year ago, anyway. BWAHAHAHA

Bear Stearns CFO.

Anonymous said...

elduledero,

You buy corporate bonds and you are buying garbage. Why would you want to by corporate bonds headed into a recession. You might be buying bonds for a company thats going bankrupt in a few months. If you want to be in a market, you should be buying puts or an ETF that goes against the market. Like SRS.

Dny

Anonymous said...

I sorta recall that Ben Stein guy saying: BUY BUY BUY BEAR STERNS! The smarter the dumberer I suppose.

Tyrone said...

Memo to Bear Stearns, you're fu**ed!

Cramer: Bernanke, Wake Up
"It's the rate; it's entirely the rate."

Really, Cramer?

Anonymous said...

Bear Stearns trouble prove that the collapse of the post bretton woods financial system created the mortgage blowout and not the other way around.
There is no housing crisis per se, to paraphrase Bill Clinton "It's the system stupid".

It is time for an FDR styled bankruptcy reorganization. They can either take the system down in an orderly fashion or they can continue to lie about the situation and the system will collapse wildly, leaving untold carnage in it's wake.

mairca izda debol said...

Wouldn't the model of capitalism that we get preached to us allow Bear Stearns to fail?

As a capitalist, I think they should be allowed to fail, along with the socialist monstrosities known as Freddie Mac and Fannie Mae.

Anonymous said...

Bushonomics is socialism for the rich.

Anonymous said...

Now you see if the Fed Chairman and all the other powers that be just proceed in a law and order way about the problems at hand ,you could gain some respect from the people .

If the People are denied Justice ,than there will b no law and order from here onward .

The powers can't really BS that they are saving the people ,when anyone with a IQ can see that they are saving the banks .

Why don't the powers and lawmakers just make a new law that any borrower that defaults on their loan with serve 6 months in jail . He he

Anonymous said...

You mean to tell me that people are just waking up to the fact that Crammer is a cheerleader for the Wall Street boys so they can churn stock ,and short stock and play games .

Creating a guy like Crammer to look like a stock man for the people was really smart .

Have you noticed that playing the stock market these days is also a short term investment idea ,just like real estate was (not to say that it isn't smart to make money on the ups and down of the stock market ,if you can afford to lose the money ).

Anonymous said...

Word from CNBC talking heads is that the market "demands" 100 bp Fed cut next week; 75 bp is already "priced in".
God help us all.

Deb said...

My ex-husband used to work at Bear Stearns and I can only say, this couldn't happen to a nicer buncha guys. ROTFLMAO!!! A bigger group of self-righteous greedmongers the world has never known. They were ALL snorting cocaine and screwing hookers with all the money they were fleecing from the public. It was absolutely disgusting. They deserve to go down in flames. I will enjoy watching them burn. An entire firm with no ethics whatsoever. Actually, an entire INDUSTRY, but I am personally glad to see Bear be the first to go under. Have fun collecting $405/week unemployment, guys! Guess you won't be able to afford your blow and your whores on that, might have to go back to Budweiser and the wife, God forbid.