There is Something About Those Friday News Stories...
Certain news stories always seem to be released at the end of the week. This story got some attention last Friday:
Two former Bear Stearns hedge fund managers indicted: A criminal indictment of two former Bear Stearns Cos. executives unsealed Thursday relies on a story line that may reemerge in future prosecutions of Wall Street figures in the wake of the sub-prime mortgage meltdown.
The indictment of hedge fund managers Ralph Cioffi and Matthew Tannin alleges that they knew the market for bonds backed by home loans given to people with bad credit was beginning to capsize in early 2007 but hid it from investors in two Bear Stearns hedge funds that held billions of dollars of such securities.
The indictment of hedge fund managers Ralph Cioffi and Matthew Tannin alleges that they knew the market for bonds backed by home loans given to people with bad credit was beginning to capsize in early 2007 but hid it from investors in two Bear Stearns hedge funds that held billions of dollars of such securities.
But I have not heard anyone on the news make the connection between this criminal investigation and the other recent news about Bear Stearns. Didn't we just bail these clowns out in March?
The Federal Reserve and the Treasury Department have orchestrated the rescue of Bear Stearns. The defenders of that maneuver argue that if Bear Stearns had failed it would have created a lot of collateral damage, so much collateral damage, that you and I, normal folk who don't know anything about high-falutin' financial instruments like "collateralized debt obligations" would have been engulfed as well. If Bear Stearns had gone bankrupt, Lehman Brothers might have been next.
Some say that if Bear Stearns had failed, the entire banking system was at risk.
Maybe.
It seems awfully hard to know for sure.
But what I do know for sure is that by subsidizing the marriage of Bear Stearns and JP Morgan, the government has removed some of the loss from the profit and loss system. Oh, they tried to make Bear Stearns suffer by demanding a price of $2 a share. But now the deal has been renegotiated — ta-da! — to $10 a share, a mere five-fold readjustment.
What's going on here?
Some say that if Bear Stearns had failed, the entire banking system was at risk.
Maybe.
It seems awfully hard to know for sure.
But what I do know for sure is that by subsidizing the marriage of Bear Stearns and JP Morgan, the government has removed some of the loss from the profit and loss system. Oh, they tried to make Bear Stearns suffer by demanding a price of $2 a share. But now the deal has been renegotiated — ta-da! — to $10 a share, a mere five-fold readjustment.
What's going on here?
9 Comments:
I still don't understand why the right wing zealots oppose taxes when those taxes are what bail them out when they get in trouble.
It's basically a matter of connecting the dots, Dr. Z, and the MSM just plain don't do that anymore. At this point, the paper's BLACK with dots, yet the criminals in power just keep on stealing. Sure, every once in a while they find a couple stooges to play patsy (see Scooter Libby, these Bear Stearns guys, etc.), but the real powers that be just keep getting richer.
Good point, Ubermilf.
Welfare is GREAT for the rich. Just don't be poor. That's gauche.
Papers don't sell if there isn't thuggery afoot.
And come on, that was waaaaaaay back in March Do you go months between meals? Of course not. Same thing here. It's high time for another bail out. Go, America, Go!
Not only were those two from Bear Stearns pinched, but the FBI also arrested or indicted about 400 people for mortgage fraud the next day.
The system is diseased.
Maybe they rolled the Stern Bears up to hold them as collateral for the bailout.
Nah.
Übermilf: Good question! Maybe we need to put them in jail to find out...
Dguzman: I know. It bothers me when I see this crap on adaily basis. And the "real powers just keep getting richer."
Unconventional Conventionist: Ha! That's the ticket!
Randal Graves: yep, the MSM has the attention span of a goldfish and the heart of a Republican.
Swinebread: Agreed! Throw 'em in the brig without milk nor cookies! ;o)
Utah Savage: If we have any more 'welfare' for the rich, we are going to become a Third World Nation.
Bubs: You're right. I should have put that in. The real 'sting' operation was the job they pulled on the American public!
Omnipotent Poobah: I doubt it. It's no longer worth anything!
Where's my bailout? President Bush told us in 2001 that the economy was dependent on consumers and to fight the terrorists we should shop, shop, shop.
So when in a heady rush of Patriotism and deep abiding love of America, I bought more stuff than I probably should have - why didn't the US Government bail me out?
*pout*
What? Didn't you get your economic stimulus check yet? ;o)
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