Posted on 03/17/2008 5:22:25 AM PDT by moderatewolverine
Some folks weigh in on Bear deal and other issues facing the global economy.
(Excerpt) Read more at primetimepolitics.com ...
I think that is about right. Of course, no one gives a damn about a Bear exec’s problems at this point.
It looks a lot like Enron, except that it wasn’t caused by accounting fraud so much as just the market decline.
There will probably be a lot of pressure on financial stocks this morning, but since Bear is out of the picture, I personally think that this is a good sign, and we are getting to the end of the tunnel.
And the fact that it was JPM who is doing the takeover ought to tell you something. They apparently are the strongest of the players.
Oh it was accounting fraud allright and these guys make the Enron boys look like pikers. The money looked like it was there, but through a complex system of hedging through derivatives, all very highly leveraged and off book it turns out it wasn't. Imagine insurance on your house where if Katrina turned out to be worse than the average hurricane (or better depending upon your strategy) they came and took away YOUR house. Well, they took away the house.
Bear isn't the end by any stretch. Bear Stearn's collapse was precipitated by the Carlyle bankruptcy, and now the 75% of Bear stocks that are owned by other banks and funds are going to cause more runs on the cash.
JP was a proxy of the Fed. Morgan gets the assets for 1/100th of their original list price, $220 million, but the real story is the $30 billion in insurance that the Federal Reserve put on the deal. JPM stocks are down significantly in early morning trading, because they could collapse now just as quickly if the "free Fed money" stops flowing.
The only bank standing strong is the Fed, the only financial institution expanding or increasing assets is the Fed - and it does so at the cost of the dollar and the willingness of foreign investors to approach American business.
The accounting frauds that Enron engaged in are now the industry standard in the US.
Enron was the test-run for ‘structured finance’. Not only is Enron NOT considered a failure in the finance world, it’s considered one of its greatest success stories.
They’ve replicated that success with our entire economy. It only took a matter of months after Bush’s inaguration to get all these ducks in a row for Wall Street, they had their boy in office and they knew he was going to let the regulatory agencies preventing these frauds die from atrophy.
Now, we live with the consequences.
Who is “they”?
Wasn't it the original JP Morgan who tried to bail out the stock market in 1929?
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