Taxpayers are bailing out Wall Street
Taxpayers are bailing out Wall Street
On this supposedly quiet Sunday afternoon in Bellingham, the world beyond us is in severe turmoil. Some of the world’s biggest bankers are in frantic meetings in New York all afternoon working with t
On this supposedly quiet Sunday afternoon in Bellingham, the world beyond us is in severe turmoil. Some of the world's biggest bankers are in frantic meetings in New York all afternoon working with top Federal agents from Treasury and the Federal Reserve. They are buying out Bear Stearns - a huge investment bank. The deal will be done in an hour and by Monday will be news.
Why the rush? To prevent a melt down of financial markets in the USA. We are close to a crash the likes of which we have not seen since 1929. If Bear Stearns is still a company in two hours when the Asia markets open then there will be turmoil. And if still a company when the NY stock markets open tomorrow morning then the stock will go down even further. Best guess is a buyout for 2 billion dollars - giving each shareholder about $17 per share. On Friday the stock closed at $30 a share. On Thursday, the shares were worth $60 each. In the last 12 months, $160, or a market worth of 18 billion dollars - and in an hour it will be worth 2 billion.
The Feb took an "undisclosed" amount of worthless home mortgage securities in exchange for our tax dollars on Friday in an attempt to stop the collapse of Bear Stearns. The conservative, Republican Bush administration is quick to practice socialism when it comes to rescuing big banks - but not a flooded city of New Orleans. So much for free market theory of conservatives. What is more interesting is the government will not tell us how much money Bear Stearns got in the deal. But then, JP Morgan may have gotten some of it for also loaning money to Bear Stearns. The Fed is not saying.
You know - as I finish writing this, they are about to announce the sale. Tis 4:15 pm. Up this goes. The Bellingham Herald had nada about it today and nothing on their website just now. Totally without a clue.
4:41 pm - news now out - JP Morgan paying only 250 million dollars for Bear Stearns. Still the Bush administration is guaranteeing JP against any losses. Imagine - buying a company for 1/80th of their value only a few months ago and still needing a guarantee. The Bear Stearns skyscraper in New York is worth 1 billion dollars by itself. Wow - the losses involved are beyond belief. All this while today US Treasury Secretary Paulson in on three TV shows saying all is well. Have no worries.
Why the rush? To prevent a melt down of financial markets in the USA. We are close to a crash the likes of which we have not seen since 1929. If Bear Stearns is still a company in two hours when the Asia markets open then there will be turmoil. And if still a company when the NY stock markets open tomorrow morning then the stock will go down even further. Best guess is a buyout for 2 billion dollars - giving each shareholder about $17 per share. On Friday the stock closed at $30 a share. On Thursday, the shares were worth $60 each. In the last 12 months, $160, or a market worth of 18 billion dollars - and in an hour it will be worth 2 billion.
The Feb took an "undisclosed" amount of worthless home mortgage securities in exchange for our tax dollars on Friday in an attempt to stop the collapse of Bear Stearns. The conservative, Republican Bush administration is quick to practice socialism when it comes to rescuing big banks - but not a flooded city of New Orleans. So much for free market theory of conservatives. What is more interesting is the government will not tell us how much money Bear Stearns got in the deal. But then, JP Morgan may have gotten some of it for also loaning money to Bear Stearns. The Fed is not saying.
You know - as I finish writing this, they are about to announce the sale. Tis 4:15 pm. Up this goes. The Bellingham Herald had nada about it today and nothing on their website just now. Totally without a clue.
4:41 pm - news now out - JP Morgan paying only 250 million dollars for Bear Stearns. Still the Bush administration is guaranteeing JP against any losses. Imagine - buying a company for 1/80th of their value only a few months ago and still needing a guarantee. The Bear Stearns skyscraper in New York is worth 1 billion dollars by itself. Wow - the losses involved are beyond belief. All this while today US Treasury Secretary Paulson in on three TV shows saying all is well. Have no worries.
