"I hate it when that happens."
-John McCain, -Hillary Clinton, -Barack Obama
These securities firms are among the largest contributors to them all. Now, as the feces hits the proverbial fan, let's watch them tie themselves in knots telling us all how this happened... and how they will look out for the rest of us when the Titanic's bow is angled toward the icy night sky.
We are in for an interesting 2008.
...the Fed is offering 28 day repos which -- if this auction works like the Fed's other facility, the TAF -- the loans can be rolled over free of charge for another 28 days. Yippee. The Fed found a way to recapitalize the banks with permanent rotating loans and the public is none the wiser. The capital-starved banksters at Citi and Merrill must feel like they just won the lottery. Unfortunately, Bernanke's move effectively nationalizes the banks and makes them entirely dependent on the Fed's fickle generosity...FULL...So now the Fed is planning to expand its mandate and bail out investment banks, hedge funds, brokerage houses and probably every other brandy-swilling Harvard grad who got caught-short in the subprime mousetrap. Ain't the "free market" great?
In fact, Bernanke is destroying the currency by trying to reflate the equity bubble...
...So the only possible justification for such Fed action is to engineer an orderly rather than a disorderly shutdown of this institution. But unfortunately the Fed is behaving as if Bear Stearns is illiquid but solvent. That is delusional and the official sector support of an otherwise insolvent institution will end up - like many other recent Fed actions - being paid for by the US tax-payer...FULL
...The emergency bailout of Bear Stearns Cos. dented confidence in other securities firms ahead of results next week from some of Wall Street's giants including Goldman Sachs, Morgan Stanley and Lehman Brothers, analysts said on Friday...FULL
...Securities Arbitration UPDATE: The Federal Reserve and JP Morgan Chase bank early Friday announced a loan of "emergency" funds to help it maintain Bear Stearn's liquidity challenges with a liquidity position that has "deteriorated" in the last 24 hours.FULLAt the same time, a Bear Stearns analyst's report indicated that the firm expected Standard and Poor's 500 financial companies to "post additional first quarter write-downs of $35-70 Billion" as credit markets are in shambles...
A financial bubble {1} is a market aberration manufactured by government, finance, and industry, a shared speculative hallucination and then a crash, followed by depression. Bubbles were once very rare - one every hundred years or so was enough to motivate politicians, bearing the post-bubble ire of their newly destitute citizenry, to enact legislation that would prevent subsequent occurrences. After the dust settled from the 1720 crash of the South Sea Bubble, for instance, British Parliament passed the Bubble Act to forbid "raising or pretending to raise a transferable stock". For a century this law did much to prevent the formation of new speculative swellings.FULL
Can't the media find any economists who don't think that handing hundreds of billions of taxpayer dollars to the big banks and the incredibly rich people who own and manage them is a good idea? Apparently not, given the coverage so far to the Fed's proposal to lend $200 billion to the banks using mortgage backed securities as collateral.FULL
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This bailout should be the "end" of the Republican Party. This conduct violates the very notion of the laissez-faire economy. If their conduct so continually violates the so-called philosophy, what good are they? They look like a Catholic Church that sexually abuses its very own children! It the empiracle evidence of the Savings and Loans crisis and now the subprime crisis do not "expose" the Republicans for the baloney they are, then the left deserves what it gets.
unfortunatly the folks who report on the crisis are owned by the perpitrators
This is the real issue. Total economic collapse because while everyone was living the high life (sucking the equity out of their homes and never expecting to have to pay it back) and buying stuff they did not need, the bankers were raking in millions and trading the securities for billions and now the investment bankers bundled that into trillions? Politic is just a distraction from the real shell game being played on Wall Street. A serious day of reckoning is coming.
Thank you for this post. I found it very informative.
Too big to fail, or too small to save.
Which applies to most Americans?
Heck, the "volunteers" in Iraq who used to kill Americans are being paid $300 per month, and Americans are being bought off with ONE check of that amount. Do we know how to bargain or what?
Is there anything at all that a citizen can do about this? Voting no longer seems to make any difference.
Yes, you can get plenty of ammo, food, and water and hunker down. Start a garden if you have the space, cut some firewood, move to a national forest if you must. Don't use the phone, don't look people in the eye, and most of all, don't ask no questions.
Excellent analysis, Stan, we've likely only seen the tip of the iceberg, so far. The Fed seems to be using tax-payer 'bubble' gum to try and patch this huge rip appearing in OUR hull. Apologies for the pun...
So this is something to gloat over, right?
I've tried to read some 'gloating' ANYWHERE between Stan's lines and I keep coming up with zip for him even having a 'minor' smugness here.
Perhaps you're asking if we SHOULD gloat that neoCON insanity has destroyed OUR economy, likely sent us into another Great Depression and inflicted much of the tax-payer base with a new 'net worth' ...of nil.
I'd have to vote for no gloating, as many people WILL be losing EVERYTHING this year. It almost seems intentional damage, possibly to hang too great a weight around the necks of the next administration. With 12 BILLION each month spent JUST on Iraq, all THAT tax-payer money produces NOTHING for OUR country but huge profits for certain corporations to continue their BRIBERY (lobbying) of OUR lawmakers.
Also, look what is happening to American citizens. They are being slowly, inexorably stripped of the little wealth they've been able to build up after years of work. Their jobs are going overseas while a new lower class (illegal immigrants) is moving into their cities with the unspoken promise that if they just hold out, the crisis will pass ad they'll have a shot at the American dream (the one that is turning sour for so many citizens). Putting aside for the sake of discussion the illegality issue, doesn't it look as though the real purpose of what is happening is to ensure that real wealth can not be accumulated by anyone other than the very few?
As I had been saying all along...
the Bu$h administration economy was an "ENRON" economy, it was based in *BU$HSHIT*!
AND THAT'S THE BOTTEM-LINE!
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Posted March 15, 2008 | 06:32 AM (EST)