Bear Stearns Bailout Exposes Fed To Billions In Losses

The Federal Reserve has seen paper losses on real estate assets it acquired when it helped JPMorgan Chase & Co buy Bear Stearns, the Financial Times reported on Monday.

The paper losses at a vehicle called Maiden Lane, which holds the assets, are due in part to debt used to finance large buyouts, including those of Hilton Hotels and Extended Stay, the paper said, citing unnamed sources.

Read the whole story: Reuters

Comments

[DHubbard]

05:23 PM on 02/17/2010

OBAMA and Bernanke are featured in a movie-- about greedy hedge funds called "Stock Shock." Even though the movie mostly focuses on Sirius XM stock being naked short sold nearly into bankruptcy (5 cents/share), I liked it because it exposes the dark side of Wall Street and revealed some of their secrets. DVD is everywhere but cheaper at www.stockshockmovie.com

[LberalSpace]

09:23 AM on 02/17/2010

We need to move our money & walk away.
good articles: http://bertreport.blogspot.com

[themodernleader]

11:30 PM on 02/16/2010

The Fed, Bush Treasury, Obama Treasury have destroyed our currency and our future. And the criminal banks are thriving on Fed lifelines. Meanwhile the mainstreet cities and small towns are crumbling. What a damnable disgrace and mismanagement. Things will continue to dissintegrate until stronger hands take command.

[Truelee]

02:01 PM on 02/16/2010

It's not a coincidence that government and business are twins of the same thing. Check this speech on how government is set up like a company and our laws are set up to benefit companies:

http://www.documentarywire.com/john-harris-its-an-illusion

[LberalSpace]

11:23 AM on 02/16/2010

Obama's financial 'reform' is failing yet again No shocker here. The volcker plan has been forgotten already. what a joke.
hat tip to: http://bertreport.blogspot.com

oh and obama fails at healthcare, iraq pull out, Guantanamo, and just just about anything else you can think of. Sending more troops to Afghanistan.

[vippy]

02:20 PM on 02/16/2010

The love affair did not last long, we fell deep and hard and now have egg on our face!

[vippy]

02:22 PM on 02/16/2010

then again, a black man was elected and our shadow government don't care about who is at the helm, they all have to do as they say! And our DEM Party is doing everything and anything to make him look bad. And guess what, people will vote for either party again, that what really blows my mind.

[lylo]

10:50 AM on 02/16/2010

I frequently worry that we have re-entered the robber baron era that preceded the Great Depression.

[guveqzero]

09:46 AM on 02/16/2010

JPM and the FED are really the same entity in this case, Jamie Dimon. Yes, it's easy to make money, a wopping $17m bonus, by transfering debt from one hand to the other. The thieves are still running free in our financial system. Dimon happens to be the most respected, well isn't that special.

[whitemale08]

09:28 AM on 02/16/2010

"I told you so..."
"I told you so.."
"I told you so..."

...but nobody wants to listen.

I will repeat myself: "Put the entire Federal Reserve System into RECEIVERSHIP NOW!"

This of course would mean Goldman Sachs and JP Morgan; they are INSOLVENT!
There is no possible way for these gambling casinos to collect over 200 trillion in nominal/fictional values in worthless derivatives and credit-default swaps.

If the government does not SHUT DOWN these so-called 'banks' then it's automaticly complicit to what's happening to countries like Greece because the U.S. refuses to enforce the law on these 'too-big-to-fail' nonsense.

[sonofsamphm1c]

11:27 AM on 02/16/2010

There are three Maiden Lanes. Recently the same newspaper reported that ML II and ML III had a 15.4 billion paper gain. Not saying that report is any more true than this one, but add all the reports up, and what do you get?

It's on paper. Good grief.

[CPAwADD]

09:13 AM on 02/16/2010

Don't buy a pig in a poke!

[LberalSpace]

08:07 AM on 02/16/2010

hat tip to: http://bertreport.blogspot.com/

[Jaspatk1701]

08:04 AM on 02/16/2010

When will we learn to actually regulate these big banks. They should have been using the money not to acquire and grow fatter, but to lend and stimulate business activity or at least repair their balance sheets. We are paying them to become much bigger that too big to fail.

They are becoming TOO BIG NOT TO SUCCEED -- ALL AT GOVERNMENT EXPENSE!! This has to end badly: either the monster firms take everyone over and there is facism by business-government cooperation (and perhaps a revolution) or a greater depression, as the system cannot take on these massive burdens. BREAK THEM UP, TAX THEM AND THEIR BONUSES, AND CLAW THEM BACK.

These things should be the first step to freeing us all from the damage they have and continue to, wreak on us all. For more, see my blog, http://www.wrathofmcgrath.com

[PhilipTaylor]

07:39 AM on 02/16/2010

RISK DOES NOT DISAPPEAR IT IS SIMPLY TRANSFERRED!

Question: Would you buy a round-trip ticket on an airplane prone to crashes?

If you answered yes, do I have an investment opportunity for you.

Citigroup, our taxpayer-funded national bank, is readying a new UNREGULATED INSURANCE credit derivative, the CLX is systemic risk insurance that pays out in the event of a financial crisis, an investors hedge.

CLX sounds like what got Wall Street into trouble in the first place including the touted safety!

Barry Ritholtz says any insurance product designed to pay off in the event of a financial crisis has to depend on the US Government and Taxpayers as the BIG RISK TAKERS! But, of course, Citigroup denies it's putting taxpayers at risk and we can all trust THEM with $303 Billion in USA Guarantees.

If Citi can't pay under proposed reforms, Citi being too big to fail gets bailouts if it ran into CLX trouble.

Still NO regulations that shows LIGHT on these Financial Scams and forced the Dark Markets into the LIGHT of DAY!

L1E: G0LDMAN’S B1ankfein testifying before the Financial Inquiry Commission, said his firm was under more scrutiny than ever, especially from the Fed. This is a 100% L1E!

Citi says regulators have been given CLX for consideration. So far, they haven't passed judgment.

[PhilipTaylor]

07:39 AM on 02/16/2010

http://www.marketwatch.com/story/citigroups-new-plan-profit-from-the-next-crisis-2010-02-16#comment3595925

[wrightj]

11:17 AM on 02/16/2010

RISK DOES NOT DISAPPEAR IT IS SIMPLY TRANSFERRED!

You are correct. Rightfully the private owners of the FED should bear this loss - but you know they will transfer it to be a public risk on the taxpayer. We must put these gangsters out of business now and make every private owner pay for these losses if it takes the rest of their lives and thier children's lives to repay. We the people (taxpayer) did not make these money transactions and I will not be held accountable for any such crimes or the repayment thereof.

[PhilipTaylor]

05:47 PM on 02/16/2010

Why do you think Geithner raised the limits on Fannie/Freddie to infinity?

[kurtvb]

06:05 AM on 02/16/2010

Forget about the bailouts. Can't do anything about that now. We have to stop banks from being investment houses. We have to stop investment houses from using derivatives. We have to stop the practice of keeping anything off of balance sheets, whether it is business, banks, or the government. Until this happens, we will have a repeat of this depression again in 50 years.

[pointyheadprodigy]

05:33 AM on 02/16/2010

The Fed lose?! That is the best thing I've ever heard about Bear-Stearns! Too bad I really just don't believe that the Fed will ever tolerate the loss of a single nickel. We'll pay $2.25 for any nickel that they might lose.

[realitytrumpsbull]

03:55 AM on 02/16/2010

Spend all you want, we'll print more! What fools we've all been, working for wages and salaries like honest people, all these years.