I was wondering whatever happened to Baghdad Bob.
Posted on 03/14/2008 11:30:08 AM PDT by TonyXL
NEW YORK (AP) -- Bear Stearns Cos., one of the most venerable names on Wall Street, turned to a rival bank and the federal government for a last-minute bailout Friday to prevent it from collapsing.
The Federal Reserve responded swiftly to pleas from Bear Stearns that its coffers had "significantly deteriorated" within a 24-hour period as rumors about the bank's situation fueled the Wall Street version of a run on the bank. Central bankers tapped a rarely used Depression-era provision to provide loans, and said they were ready to provide extra resources to combat an erosion of confidence in America's biggest financial institutions.
(Excerpt) Read more at biz.yahoo.com ...
DOW down in anticipation.
"In the summer of 1932, Franklin D. Roosevelt, Governor of New York, was nominated as the presidential candidate of the Democratic Party. In his acceptance speech, Roosevelt addressed the problems of the depression by telling the American people that, "I pledge you, I pledge myself, to a new deal for the American people." In the election that took place in the fall of 1932, Roosevelt won by a landslide. The New Deal Roosevelt had promised the American people began to take shape immediately after his inauguration in March 1933. Based on the assumption that the power of the federal government was needed to get the country out of the depression, the first days of Roosevelt's administration saw the passage of banking reform laws, emergency relief programs, work relief programs, and agricultural programs. Later, a second New Deal was to evolve; it included union protection programs, the Social Security Act, and programs to aid tenant farmers and migrant workers. Many of the New Deal acts or agencies came to be known by their acronyms. For example, the Works Progress Administration was known as the WPA, while the Civilian Conservation Corps was known as the CCC. Many people remarked that the New Deal programs reminded them of alphabet soup.
By 1939, the New Deal had run its course. In the short term, New Deal programs helped improve the lives of people suffering from the events of the depression. In the long run, New Deal programs set a precedent for the federal government to play a key role in the economic and social affairs of the nation.
I don't suppose Bear Sterns executives forgoing their bonuses was a condition of this bailout?
While we are trying to stretch a buck at the end of the month, these clymers are taking home multi-million paychecks and WE have to bail them OUT?? HEY WHAT GIVES?!
The reason for the refinancing is that the capital base of the bank has eroded, which has halved the stock.
The halving of the stock has also wiped out their bonuses.
That's one positive aspect of stock option bonuses: if you screw up, your bonus is worthless.
Keeping the wheels from falling off everything, looks like a priority at this point.
That seems like it should be one of the roles of limited government; similar to what they did in 1987.
Those stock options are now mostly worthless. So, of the $120MM in compensation you listed, the market has already extracted about $115MM in value without any regulatory intervention.
>> The Federal Reserve responded swiftly to pleas from Bear Stearns that its coffers had “significantly deteriorated” within a 24-hour period
Say... yathink that’ll work if WE try it? My coffers could use a little topping off...
“Dear Ben,
How are you? Wife and kids OK? Swell GQ beard thing you got going!
Say, Ben, I was wondering if you could float me some of that free Federal money...
...”
It’s a spiral. People fear a company is in trouble and do the wall street equivalent of a “run on the bank” and then the company really IS in trouble even if it isn’t. Now, Bear really was in trouble, but recent unrelated events haven’t helped much.
IMHO, it is the JOB of the FED to prevent “runs” on banks caused by panicked depositors. So I am very pleased that the threatened “run” on Bear Stearns has now been stopped, without the FED having to print a single new dollar ( notwithstanding your ill-informed “comment” to the contrary).
America is still a free country, so you can be “nostalgic” for the 20%+ unemployment rates, the impoverishment of the middle class and the bread-lines of the Great Depression, if the prospect of a return to such misery is pleasing to you.
But I much prefer the “soft landing” that Bernanke seems to be pulling off, in spite of all the well-paid gloom-merchants who dominate the media.
And in spite of the moralistic bleating of people who could benefit from learning the difference between “adding liquidity” and “printing money”.
I was wondering whatever happened to Baghdad Bob.
BSC would apparently consider his resume “Most Impressive”.
You are absolutely correct, Tony, no question about it.
What I am curious about is why is everyone so up in arms when it is Wall Street that makes a mistake? Scores of nurses and carpenters quit their jibs in the last few years to flip houses. Why do not anyone object when we bail them out? People simply walk out on the homes whose value falls below the mortgage. They are never to be blamed and must also be bailed out.
Has class warfare so permeated our culture that the suffering of anyone related to Wall Street causes joy? And its not even officers of the company that suffer here -- its the millions of retirees, widows and orphans, whose mutual funds own Bear's stock. They lost one half of the money today.
Scores of nurses and carpenters quit their jibs in the last few years to flip houses. Why do not anyone object when we bail them out? People simply walk out on the homes whose value falls below the mortgage. They are never to be blamed and must also be bailed out.
Well I don't think walking away from a mortgage is being bailed out. Among other side effects: your credit is shot, your ability to get another home loan is gone, as many top employers use credit reporting as a part of the interview process your ability to get a job may be impacted, and depending on the state you may still be liable for some or all of the difference between what you borrowed and what the distressed property can be auctioned for. I know some people who lost their houses and it was a very, very painful process. I didn't see anyone bailing them out (as in a Federal banking agency shows up and gives them a check for a big chunk of the mortgage they owe so that they can keep the house and have payments they can afford.) Until recently they even owed the IRS taxes on the forgiven loan.
The Masters of the Universe however don't really suffer any serious consequences. The CEO had a $50 million pay day last October. Even if he can never work again, so what?
Has class warfare so permeated our culture that the suffering of anyone related to Wall Street causes joy?
Maybe. I think most people view many on Wall Street as only slightly better than theives. There has been a round of well publicized scandals involving these banks, most of which involved screwing the little guy. Class warfare works two ways, doesn't it. Not to mention that millions of Americans have seen their companies bought out usually led by one of these big banks. I've been through two mergers. It would take me an hour to explain everything that is wrong with them. They have been bad for investors (shareholders), employees and customers. The only people really making out have been the investment bankers and the emerging supergiant conglomorates.
And its not even officers of the company that suffer here -- its the millions of retirees, widows and orphans, whose mutual funds own Bear's stock. They lost one half of the money today.
That's really funny. Did you post that somewhere else? Lots of stocks lose 1/2 their value every day, or over a few weeks. FedGov doesn't make up those loses. Smith and Wesson went from 20 to 5. I didn't get a check from the Federal Reserve Bank of San Francisco. I didn't even get sympathy. What makes Bear Stearns, and other super-connected Wall Street firms, alone, worthy of bailouts.
To bail out Chrysler, a company that employed hundreds of thousands, and produced cars driven by millions (that they would like parts for) took an act of Congress.
No such laws needed for this operation!
I can't believe you had to even ask this question.
I am afraid, it only confirms my suspicions: in complete agreement with the Marxist viewpoint, a person' value is monetary.
They get bigger Christman bonus's than most people will make in an entire career of working 50 hour weeks.
So what? They are either moral or immoral, correct or incorrect --- what does it have to do with their money. It's YOUR values that this sentence reflects.
And, incidentally, nobody minds NBA's prostitutes, although those players' salaries dwarf salaries and bonuses of the CEOs. It's CLASS envy, my friend. Michael Jackson makes every year fifteen times more than an average CEO of major corporation, but we are raised to believe that he is not in the same class. Same with gangsta-rap producers: they're just hoodlums from the 'hood --- just like the rest of us, right. Now, CEOs are the "moneyed class," the bourgeoisie. Straight from Marx.
As of the people you know that lost their houses, it is indeed very painful process. But that is past, when this occurred under "normal" circumstances. Now, that the economy is in trouble, they'll do everything possible to bail out the flippers and the greedy that, instead of buying a smaller house, bought a bigger one with zero down. That's the rule: as long as you walk with the heard, you'll not get hurt.
The CEO had a $50 million pay day last October. Even if he can never work again, so what?
Once again, YOU measure everything from the monetary perspective. The composer for Beech Boys is a multi-millionaire. He also spent almost all of his life suffering from a serious, debilitating depression. Sure, some of it is chemical. A big part of it is, however, that it is difficult to find what to do after reaching a pinnacle at 25. Long ago, Socrates sad that life by itself is worth nothing --- it's the virtuous life that matters. That was the wisdom of Western civilization for a long time. Even recently, in this country, people proclaimed "Give me liberty of give me death!" That was the American Dream. Now it's homeownership.
A CEO, too, may kill himself, if he finds no application for his talent. Money is far from everything. It is only for Marxists.
I think most people view many on Wall Street as only slightly better than thieves.
I know, defaming people is a sport today.
Judging from your remarks, you do not understand the value they provide and what they are paid for.
In particular, according to you, mergers have no value and create only harm. Well, if you disregard the benefits and include only costs, every endeavor is a disaster.
Lots of stocks lose 1/2 their value every day, or over a few weeks. FedGov doesn't make up those loses. Smith and Wesson went from 20 to 5. I didn't get a check from the Federal Reserve Bank of San Francisco. I didn't even get sympathy. What makes Bear Stearns, and other super-connected Wall Street firms, alone, worthy of bailouts.
My remark does not indicate in any way that I endorse the bailout. It only says that envy and anger are misdirected. As you yourself pointed out, the CEO will have what to live on whether Bear Stearns survives or not. It only underscores the irrationality of class warriors and immorality of their envy.
"There is no reason to panic. Return to your staterooms, we will be underway shortly. The pumps are working perfectly. The situation is contained."
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