Posted on 03/14/2008 10:18:55 AM PDT by Jack Black
In a dramatic move Friday, J.P. Morgan Chase & Co. and the Federal Reserve Bank of New York stepped in with emergency funds to keep beleaguered investment bank Bear Stearns Cos. afloat. The move, during a week of worry about whether Bear could continue to meet its obligations, took the credit crisis to a new, more serious stage and was a reminder of how quickly an erosion of confidence can undermine even leading financial institutions. The involvement of the Fed -- coordinating with the Treasury Department and the Securities and Exchange Commission -- made clear authorities were concerned about the risks to the broader financial system. Bear is the smallest of Wall Street's big five investment banks, but it is a significant player in markets for debt, particularly for securities backed by mortgages. Bear Stearns's problems built this week, as counterparties in the market grew extra cautious about entering deals with the bank. Bear's executives tried all week to reassure markets that its financial position was solid. But in a week that also saw the collapse of the $22 billion, mortgage-focused hedge fund Carlyle Capital, those reassurances went unheard, and Bear ultimately was forced to seek help. "We have tried to confront and dispel these rumors and parse fact from fiction," CEO Alan Schwartz said in a release. "Nevertheless, amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated. We took this important step to restore confidence in us in the marketplace, strengthen our liquidity and allow us to continue normal operations." Officials at Standard & Poor's and Moody's Investors Service have been meeting Friday to discuss whether the developments at Bear Stearns require a downgrade of the company's credit rating, and if so, by how much. ...
(Excerpt) Read more at online.wsj.com ...
Sickening how the so-called “smart money” is bailed out.
Disgusting.
What happened to all the money? Didn’t these guys get HUGE bonuses? Where else did the money go? I don’t get it.
Bet any amount that the paychecks will not suffer because of this.
It is criminal that the taxpayer is subsidizing these crooks. How many people who lost out during the tech wreck were helped by the govt? Nada.....as it should be!
If the FED has to bail them out why is BSC stock above zero?
Say hello to screaming price inflation and the continued deterioration of home values for all, most definitely including those who paid their morts on time.
"We have tried to confront and dispel these rumors and parse fact from fiction..." Officials at Standard & Poor's and Moody's Investors Service have been meeting Friday to discuss whether the developments at Bear Stearns require a downgrade of the company's credit rating.
The company is bankrupt, requires a bailout, and S&P wonders if they need to downgrade the credit rating.
I know. Every company that is on the brink should have their credit rating upgraded because now the FED will step in and bail them out. So bad news is good news.
George Orwell! Calling George Orwell! George, where are you? Do your read us, George?
By BLOOMBERG NEWS
Published: December 22, 2006 Bear Stearns gave its chief executive, James E. Cayne, a bonus of stock valued at about $14.8 million after the firm reported its fifth consecutive year of record profit.
Of course that was 2006. 2007 I believe no bonuses were given. Of course you don't need to get $15 million TOO many years in a row to have a REAL GOOD DECADE.
LOL! Laughing all the way to the bank...
Yesterday their financial position was “STRONG”, per the CEO.
“Orwell” is right.
Stop bothering me with these trifles. I’m busy reading everything about Spitzer and his ‘date’.
Only last year, the guy who sits next to you who traded mortgage bonds didn't lose 10 million he lost 100 million and there went your profits too. They fire that guy, (thats easy) but the bank has a contract with you so they still have to pay. Even worse, if they don't pay you, then you will almost certainly quit and go to work for someone who will. Where does that leave the bank?
This crisis has nothing to do with the fact that some people still got paid well last year. and I've never met anyone on Wall Street who made a lot of money without earning it.
Good question.
And if the Fed has to bail them out, they sure as heck better not be any million dollar paychecks meted out.
It's not the "buddies on Wall Street" that are getting the money but retirees, widows and orphans, whose mutual funds own Bear. It is they who lost one half -- yes, about one half -- of their money today.
Well...that makes sense.
I guess to keep the guys with a good track record they have to pay out and as long as nothing goes wrong then it’s worth it to the investors.
What a high stakes business.
Re: I’ve never met anyone on Wall Street who made a lot of money without earning it.
Like all of the analysts who never saw the debalce of Enron? Or Worldcom? Or Global Crossing? Or Tyco? Or Bear Stearns?
I sincerely hope you just forgot a sarc tag.
Bingo.
This is the “smart money”.....why should they need a dime from the Fed?
Time to garnish the wages of top management, if you ask me.
I will definitely second that motion!
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