JPMorgan Chase, with Federal Reserve Bank of NY, to provide funding to Bear Stearns

[Purveyor]

Source: Associated Press

NEW YORK: The federal government and JPMorgan Chase & Co. teamed up on a bailout of Bear Stearns Cos. on Friday, a last-ditch move to save the investment bank, which acknowledged its dire financial straits after a week of firm denials.

Bear Stearns lost half of its value within 30 minutes of the market open.

While it was not clear exactly how much money Chase would pump into Bear, a person familiar with the bailout, who spoke on condition of anonymity because the talks are private, said Chase may end up buying Bear Stearns outright.
--
Rumors have persisted throughout the week that Bear Stearns was facing major liquidity problems, but the investment bank's chief executive initially denied those rumors.

"Bear Stearns has been the subject of a multitude of market rumors regarding our liquidity," Bear Stearns president and chief executive, Alan Schwartz, said in a statement. "Amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated."

In a memo sent to employees, Schwartz said the temporary financing would allow the company to "get back to business as usual."



Read more: http://www.iht.com/articles/ap/2008/03/14/america/Bear-Stearns.php

[islandmkl]

1. "...get back to business as usual."

manipulating and plundering the economy by losing money faster than the Fed can print it....

bailout? was someone in jail?

[coalition_unwilling]

2. "Back to business as usual" - Whoever this CEO Schwartz fellow is, he

lacks an ear for irony, n'est-ce pas?

[Purveyor]

3. It was just on Wednesday that CEO Alan Schwartz was on CNBC telling all that

things were just fine at Bear Stearns and there was no liquidity problems.

[Deny and Shred]

4. Common stock drops from $160 to $30 in a year, $57 to $30 today!

But I'm sure the underpinnings to our financial system is fine. I'm not usually a sky-is-falling type, but -
There's only $45 Trillion in notional value in credit derivatives.
Virtually every major investment bank is taking billions in quarterly write-downs (losses)
The dollar needs a parachute, and is at post-WWII historic lows. The FED under Bush treats their monetary policy as a license to print $$$. Fiat money issue may be the financial barbarian at the gate
Major industries have packed up for other shores, Fortune 500 firms continue to move units off-shore to avoid paying for the national debt. Bush wants to make the tax cut permanent.
Hmmm - I know there are more reasons to worry about US finances. Help me out here...

[goforit]

5. Yes, Brittain takes total control!!! Makes me sick!!!

[RedEarth]

6. This is really bad news.... the depth of the financial crisis

seems to be a lot deeper than anyone imagined. The Fed is scared to death and they're attempting to do anything to keep the bottom from falling completely out from underneath our economy. The next few months could be very, very interesting.

[Warren Stupidity]

7. Second major failure in as many days.

Starting to feel a lot like Hoover.

[Supersedeas]

8. nothing to see here -- feed them more 'news' about Spitzer's escort

[Hart2008]

9. Bush, Sr., and his Carlyle Group causes Bear Stearns collapse!!!

Old man shrub had his hand in this mess too, since he is a big part of the Carlyle Group:

For Bear, the crisis started when market speculation grew that it might have to seize collateral -- mostly mortgage-backed securities worth next to nothing -- from the private equity firm Carlyle Group.

Carlyle runs a bond fund and has come under intense pressure during the past week from creditors demanding collateral to back their investments.

As speculation swelled in the market, investors, customers and lenders raced to withdraw their money or rescind their credit lines. By Thursday night, Bear Stearns Chief Executive Alan Schwartz said, the bank realized the withdrawals might outpace the bank's resources -- so it reached out to JPMorgan for help.
...
In backing up JPMorgan, the Fed dusted off a rarely used, Depression-era provision to provide loans. It also said it was ready to step in to fight an erosion of confidence in the nation's largest financial institutions.
...
JPMorgan, the nation's third-largest bank, has been hurt far less by the mortgage mess than other financial institutions. It will provide secured loans to Bear for four weeks -- insured, in essence, by the Fed.

http://biz.yahoo.com/ap/080314/bear_stearns.html?.v=21

Since Bear Stearns is an investment firm, and not a bank, they needed JPMorgan to get the guaranteed loan.

So now the U.S. taxpayers get to hold the worthless paper that Bush, Sr. was passing around.
:wtf:

Any chance of a Congressional investigation of this?

[unkachuck]

10. I don't get it....

....so, what are we going to do?....are we going to take treasury money to bail-out this shitty 'bear stearns' so they can pad their nest and stay in business long enough for the investors to recoup and then go bankrupt leaving us holding their shitty bag....or are we going after Universal Healthcare?

[western mass]

11. Good think we have corporate socialism...

to keep free-market capitalism afloat.