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Comments

1. #1
   On March 17th, 2008 at 9:12 am, Hoodlumman said:

   Nice Job, Cramer!

   Bring on the civil suits!!

2. #2
   On March 17th, 2008 at 9:18 am, WheresMyAmerica said:

   Curious? What type of Golden Parachutes will be deployed by the Execs of Bear Stearns? I’m sure we’ll not hear much about this as any poor soul that had investments with them just saw there investment drop by 94.4 percent. Disgusting! I think the next term Michelle should use is Bail-palooza.

3. #3
   On March 17th, 2008 at 9:20 am, bloghooligan said:

   and the alternative was….?

   we can complain and moan about the lending practices of the last few years, but what good does that do now? right now, the job of the fed is to stabilize the market for all of our good. $2/share is better than $0/share + reverberating market consequences.

4. #4
   On March 17th, 2008 at 9:25 am, rjd27 said:

   This isn’t a bailout. Bear Sterns is no more – it’s now part of JP Morgan. Wouldn’t a bailout have resulted in Bear Sterns continuing to exist?

5. #5
   On March 17th, 2008 at 9:29 am, Michelle Malkin said:

   J.P. Morgan Chase & Co. is buying battered broker Bear Stearns Cos. for $236 million in a Federal Reserve-backed bailout unprecedented in scope and execution.

   The Federal Reserve, which cut the discount rate in a coordinated move with its announced backing of the deal Sunday evening, is taking the extraordinary step of providing special financing in connection with this transaction.

   The Fed has agreed to provide financing of up to $30 billion of less-liquid assets held by Bear Stearns. Roughly $20 billion of that funding will back mortgage securities.

6. #6
   On March 17th, 2008 at 9:30 am, flutejpl said:

   Jim Cramer will probably just say that he couldn’t see the Bear Stearns fire sale coming because of all the tears in his eyes over the plight of his dear friends Eliot and Silda.

   Friends of mine have thought of Cramer as one of the dullest tools in the shed for some years. I have a feeling that many more people are feeling that way today. All they’re going to get for his advice is a heck of a tax write-off.

7. #7
   On March 17th, 2008 at 9:42 am, longbow said:

   How is this bailout consistent with the principles of free market capitalism?

   Where does the money come from for this bailout? Magically, out of thin air? Or are there consequences, and not good ones, when the government steps in to “help” the free market?

   Am I getting the wrong impression with first the mortgage bailout of people with ARMs that they can’t or won’t pay, and now this bailout, that we are no longer committed to free market principles?

   Am I just an old fuddy-duddy, that I still believe it when Ronald Reagan said “Government is not the solution to our problems; government is the problem.” What in effect is George Bush saying – “Hi, I’m from the government and I’m here to help you?” How is this different from what the socialists/liberals/leftists want?

8. #8
   On March 17th, 2008 at 9:48 am, Sean.Hackbarth said:

   It’s not so much wanting Bear Stern to sink or swim. It’s how much damage will a Federal Reserve bailout prevent? The alternative was Bear crawling along for a few more days before filing for bankruptcy. All that time the financial markets would freak.

   A bailout isn’t a good thing at all. It looks like it’s the least worst of bad options.

   If you want to point a finger I’d eye the Fed for lowering interest rates too much allowing all that excess money to go into the housing market. Now, we might be stuck with a recession and inflation–ie. “stagflation.”

9. #9
   On March 17th, 2008 at 9:49 am, nbarry said:

   Sadly, this is going to get worse before it gets better. The proper analogy here is the bursting of the Japanese real estate bubble way back when that plunged the country into a deep recession that took years to emerge from. I think that we need a reminder of that event as a guide to righting our economy.

10. #10
    On March 17th, 2008 at 9:59 am, Sean.Hackbarth said:

    nbarry, Japan’s biggest problem was/is many of their banks refused to write off their losses. They were stuck in an economy of 0% interest rates and little growth. The U.S. situation is many in the financial markets don’t know the financial situations of firms deep in mortgage-backed securities. Some firms and investors if given the time will be able to blow off some of the fog and find value and price it appropriately. Right now, policy makers have to give those people time.

11. #11
    On March 17th, 2008 at 10:03 am, secondsight said:

    1). Steve Forbes on CNBC Monday am: GAAP rules that force ‘mark to market’ (balance sheets must reflect current value as set in the marketplace) of debt instruments (mortgage-backed securities, for instance) have forced these companies to ‘recognize losses’ that have not happened, and may not happen. Forbes suggests abandoning this rule and to go instead to recognize losses when they really happen not when the market is reluctant to buy an asset.
    He is probably right.

    Forbes on (1980′s) Japan: they refused to recognize mortgage losses at all. Not at mark to market, nor even when they actually defaulted. (It took 3 different governments or so before someone came to power and forced loss recognition thereby restoring confidence in their banking system.)

    2) Bear Sterns is being punished for its risky business strategy which borrowed 30x its own money to buy mortgage instruments. The Fed’s point is that ‘you may be big, but you are not going to file bankrupcy and stiff your lenders. Instead, you are going to lose your shirt first.’

12. #12
    On March 17th, 2008 at 10:21 am, YoungAndRestless said:

    At this point I think the problem goes beyond “subprime”. Right now there is a confidence problem in the whole financial system. Even last week George Bush and Paulsen were talking about, “We favor a strong dollar”… they have actually been consistent in saying this for years but the actions of the Fed, in holding interest rates low and cutting them lower have crushed the dollar. All of the vehicles like the TAF are temporarily helping to prop up banks. But long-term interest rates aren’t following the low interest rates by the Fed.

    Do you have your brown pants on? With what manufacturing are we going to life ourselves out of this recession? If we have actually been able to export a lot of the pain to China, do expect them to re-take Taiwan after the Olympics are over.

    Bernanke has written papers about what he’d do in a situation like this… print money!

    Anyway, we’ve done this to ourselves. Ask your friends if anything is wrong, most likely they also think this is limited to a few homeowners upside-down… ruh roh!

13. #13
    On March 17th, 2008 at 10:26 am, Sean.Hackbarth said:

    secondsight, so what Forbes is saying is financial whiz-kids couldn’t calculate the potential future losses/gains if firms didn’t have to use the current GAAP rule? I don’t know. But since they use stuff like EBIDA and other accounting concepts I would think they could work around that.

    I do agree with him on Japan’s problem. The U.S. isn’t in that straight. Wall Street would love nothing more than to figure out the value of these complex financial instruments and the Fed wants to help unravel them.

14. #14
    On March 17th, 2008 at 10:33 am, YoungAndRestless said:

    Re: Japan
    At least Japan had a positive savings rate to help them through this. We’ve got a negative savings rate and huge budget deficit. Does anyone see a good endgame in the face of rising energy costs? We’re going to have to re-build all of the manufacturing base that was outsourced.

    Re: GAAP Rules forcing “Mark to Market”
    I don’t believe Forbes. That’s like saying “we’re not going to consider your home value worth more just because your neighbors were able to sell at 400% your home price”. The market needs more not less regulation (can we unrepeal Glass-Steagall?). Isn’t “Mark to Market” a little bit like having the Kelley Blue Book value? Can I write-off my 10 year old car at the inflation-adjusted value since I haven’t sold it?

15. #15
    On March 17th, 2008 at 10:45 am, YoungAndRestless said:

    One more thing: not a bailout?
    

    The Fed also will lend to the 20 firms that buy Treasury securities directly from it. In a further step, the Fed will provide up to $30 billion to JPMorgan Chase & Co. to help it finance the purchase of Bear Stearns Cos. after a run on Wall Street’s fifth-largest securities firm. Opening up lending to firms other than commercial banks represents a shift in the Fed’s 94-year history.

    Quote is from Bloomberg via one of the great economists at blogspot.com. This is another arena where the Dinosaur newspapers are getting killed by even anonymous(but trusted and track-record) people on the Internet. Ok I’ll stop spamming the thread. I lost my voice over the weekend due to whatever cold thing is going on (I had a touch of the flu earlier the month). I suppose having a 2-year-old doesn’t help at all, at least his immune system is holding up.

16. #16
    On March 17th, 2008 at 10:47 am, Sean.Hackbarth said:

    YoungAndRestless, rebuild our manufacturing base? The U.S. manufactures more than ever before. We just do it more efficiently.

17. #17
    On March 17th, 2008 at 10:56 am, J S Ragman said:

    On March 17th, 2008 at 10:03 am, secondsight said:

    2) Bear Sterns is being punished for its risky business strategy which borrowed 30x its own money to buy mortgage instruments. The Fed’s point is that ‘you may be big, but you are not going to file bankrupcy and stiff your lenders. Instead, you are going to lose your shirt first.’

    I’ve got to agree with you there. I think the next part should be that the Fed is trying to stop the first domino in what people think is going to be a domino effect in the investment banking sector. It remains to be seen if their plan will work or not.

    Being in the business, I would have to say that left to themselves, most investors make exactly the wrong choice with their money, getting into the market when prices are high, and getting out when prices are low. That’s why we’ve seen so much gyration in the markets over the last six months. It’s from people making dumb emotional decisions based on the headlines of the day.

    As to Cramer, in this case, he’s an idiot. Lucky for him they have several pages of disclaimers that flash across the screen at light speed at the end of every show that tell viewers not to take anything he says as investment advice.

18. #18
    On March 17th, 2008 at 11:10 am, YoungAndRestless said:

    Re: Sean Hackbarth
    Interesting story. Given the disparity of wages and globalism gospel that everyone has adopted over the past 20 years. Given in that article it says something like wages in China are $0.50/hour, vs. wages in American are $15/hour (and this is similar in other developing nations like India). Given that our economy is very consumerism based (sorry I don’t have any data to back that up)… American standard of living is only going to go down while “developing nations” go up… since we are competing with nations we can’t compete with for human-wages.

    Your article also quoted numbers but not people. Do you think more or less people are involved in manufacturing industry (I’d need some type of per capita apples-apples comparison) than in 1970, 80, etc? I’d thought the prevailing notion was that our economy was moving more towards services based, so I’d think more people have service-types of jobs which are going to go caput in an economic downturn like this.

    I’m not really trying to argue, I’m just trying to learn something here. I do agree that we should shift to do things more efficiently, and we should shift to be the leaders of more emerging technologies (like biotech)… but eventually won’t all of that stuff get outsourced also… since global wages are less than American wages? Have you tried not buying any cheap-junk from China or overseas?

19. #19
    On March 17th, 2008 at 11:16 am, WheresMyAmerica said:

    I’m sorry, but I think it’s time we had a little Tough Love. This is just another “borrowing from peter to pay paul” maneuver that will most likely only temporarily relieve the suffering. A little accountability by the supossed geniuses running these great failed companies would be nice too.

20. #20
    On March 17th, 2008 at 11:18 am, Sean.Hackbarth said:

    YoungAndRestless, I do think fewer people are involved in manufacturing. That’s not a bad thing. It means those firms have gotten better at using labor and capital. That’s a good thing.

    I highly doubt all U.S. manufacturing will be outsourced. There’s too many constraints. For example theoretically all our automobile manufacturing should be in Japan. In reality Japanese firms have build so many plants in the U.S. I could argue they aren’t really Japanese firms any more. A specific example is Toyota’s trucks. They’re built in the U.S. because there isn’t that big a market for them in Japan. The same can be said for BMW SUVs.

21. #21
    On March 17th, 2008 at 11:24 am, Mister P said:

    This whole crises was produced by the Fed. It started 7 years ago with the ridiculously low interest rates the heated up the housing market while discouraging savings. Then they have continued to “print” money through the banking system for mortgages on over-priced houses. This has devalued the dollar to a point that the only good investments in the last 7 years have been alternatives to the dollar (foreign currencies, gold etc). Now they are trying to inflate themselves out of a depression.

22. #22
    On March 17th, 2008 at 11:26 am, Sean.Hackbarth said:

    Mister P, we’re not in a depression yet. Unemployment hasn’t even hit double-digits. Let’s be concerned but not get carried away.

    I do think the Fed deserves much of the blame for this business cycle.

23. #23
    On March 17th, 2008 at 11:29 am, YoungAndRestless said:

    Re: Sean Hackbarth
    Interesting story. Given the disparity of wages and globalism gospel that everyone has adopted over the past 20 years. Given in that article it says something like wages in China are $0.50/hour, vs. wages in American are $15/hour (and this is similar in other developing nations like India). Given that our economy is very consumerism based (sorry I don’t have any data to back that up)… American standard of living is only going to go down while “developing nations” go up… since we are competing with nations we can’t compete with for human-wages.

    This data also quote $$$ of manufacturing, not people and actually pointed out the number of people employed in manufacturing jobs is shrinking (and to stay at a stable level it should be grown). So if less people are involved in manufacturing I don’t see that as a sign that manufacturing is strong in America.

    I’m not really trying to argue, I’m just trying to learn something here. I do agree that we should shift to do things more efficiently, and we should shift to be the leaders of more emerging technologies (like biotech)… but eventually won’t all of that stuff get outsourced also… since global wages are less than American wages? Have you tried not buying any cheap-junk from China or overseas?

24. #24
    On March 17th, 2008 at 11:32 am, YoungAndRestless said:

    D’oh, didn’t realize I double-posted. Anyways, just think about the hit to people close to retirement. House value in decline, 401k in decline, ouch! I think the whole Bush homeownership society was a scam.

25. #25
    On March 17th, 2008 at 11:33 am, Mister P said:

    I didn’t say we are in a depression Yet. I said they are trying to avoid a depression by continuing to lower interest rates and further devalue the dollar.
    Fortunately for me I abandoned stocks years ago and went to gold and silver and now gold has gone up over 350 percent since I purchased it. Has gold really become more valuable or has the fed been stealing our wealth by devaluing the dollar.
    But as far as the d word. let me be the first to say we are heading for a depression. The fed is fearful of a run on the banks. The dollar is becoming worthless. This has been happening for years, and only now are some people waking up.
    BTW: Unemployment is much higher than reported since it like GDP is government newspeak and relates little to reality.
    I would compare the current situation to the stagflation of the early 1980s.

26. #26
    On March 17th, 2008 at 11:35 am, Mister P said:

    Just got back from Honolulu. If you don’t think we are already a 3rd world nation just compare Honolulu to what it was 40 years ago. It is now looking more like Mexico City.

27. #27
    On March 17th, 2008 at 11:48 am, secondsight said:

    Sean.Hackbarth said:
    secondsight, so what Forbes is saying is financial whiz-kids couldn’t calculate the potential future losses/gains if firms didn’t have to use the current GAAP rule?

    I think Forbes was saying that the GAAP rule forced companies to value these holdings at zero only because no one was buying them in the current market.

28. #28
    On March 17th, 2008 at 12:54 pm, gollumclone said:

    An overview of one interesting possibility:
    http://www.thegreatbustahead.com

    if this is what we are headed to in future, I don’t see how many of us can bail out of real estate easily. Here in Fla., any in-state moving generally means next house you buy will cost you far more in real estate taxes, due to Homestead exemption limiting increases to 3% a year on what you currently own.
    I’ve heard CA prices have been plunging also.
    Funny how the big guys get bailed out when in trouble and seem to bear little if any risk, while most of us peasants just take it on the chin.

29. #29
    On March 17th, 2008 at 12:54 pm, Sean.Hackbarth said:

    secondsight, then smart financial whiz-kids would ignore the GAAP rule and estimate the values. They don’t treat GAAP as god.

    Maybe I’m giving smart people on Wall Street too much credit. The ones at Bear Sterns certainly weren’t bright.

30. #30
    On March 17th, 2008 at 1:11 pm, AlohaGuy said:

    Welcome to the new Peso. Precious few exports, and the massive friction from paying for everything from education to health care for millions of illegals, a negative savings rate, and no disincentives for financial ireesponsibility.

    Bear Stearns – let’s see, pay out multi-million dollar bonuses every year but when things go wrong, Uncle Sugar shows up to make sure the millionaires aren’t troubled. Certainly skews the Risk/Reward ratio…

31. #31
    On March 17th, 2008 at 1:14 pm, AlohaGuy said:

    Just got back from Honolulu. If you don’t think we are already a 3rd world nation just compare Honolulu to what it was 40 years ago. It is now looking more like Mexico City.

    Huh?

32. #32
    On March 17th, 2008 at 1:22 pm, tony the tiger said:

    Okay, I broke my usual practice to watch the clip… nothing new there.
    Cramer is to MSNBC what Geraldo “The Spitter” is to FOX … when they come on, I change the channel.

33. #33
    On March 17th, 2008 at 2:01 pm, Regulus said:

    Michelle states:

    I warned from the start of stimulus-palooza that we were headed in this direction. Both political parties support these massive government interventions–from empowering judges to meddle with private contracts to backing billions in mortgage securities. This isn’t the last step. It’s the first. And you know who will end up getting screwed: The responsible and the frugal.

    That’s hardly a revelation.

    Ever since Franklin Roosevelt’s New Deal we became and have remained a “bailout society.” Am I alone in recalling the Savings & Loan bailout from the 1980s? Or the Chrysler bailout? Or how most if not all of our Federal entitlement programs from Social Security to AFDC to Welfare to Medicare and Medicaid are “bailouts” of one form or another?

    We bail out companies, social groups, individuals, and in the case of at least Mexico, whole countries from the consequences of their own short-sightedness, greed and corruption. And we do it all by putting it on the American taxpayers’ tab (i.e., The National Debt).

    “Suck It Up” might’ve been a persuasive financial and societal prescription through the 1920s, and possibly would’ve been the better answer to the Great Depression, but that’s a moot point now. The American body politic, including the electorate as well as the politicians, has long ago rejected it in favor of Uncle Sugar’s “I feel your pain.”

    The only thing that may change that attitude will be at the point when – after the Baby Boomers have sucked it for all it’s worth – the taxpayer well runs dry. And then, instead of feeling our pain, the Feds will say to the American people: “You’re On Your Own.”

    That swinging of the social pendulum back to “Rugged Individualism” – and the Second American Revolution it will give rise to – will be “news.”

34. #34
    On March 17th, 2008 at 2:20 pm, publiuswarmac9999 said:

    When we started rewarding failure and punishing success, we started down the road to socialism. There have been no successful socialist nations in history, and some have been downright destructive – Hitler, Stalin, Mao, Pol Pot, Castro, Chavez and others simply destroy the wealth of their countries.

    One other comment: If Obama somehow made it to the Presidency, then the problems we are no experiencing in the financial markets will look like child’s play. He is a tax and spend, protectionist Democrat — and that is the last thing we need now. (Actually, rather than stimulus packages and Fed Reserver tinkering, we need a massive tax cut to stimulate the American economy. We also need to deregulate and get rid of a lot of bureaucracies that have become an impediment to innovation.)

35. #35
    On March 17th, 2008 at 2:37 pm, granite said:

    On March 17th, 2008 at 2:01 pm, Regulus said:

    “Michelle states:

    ‘I warned from the start of stimulus-palooza that we were headed in this direction. Both political parties support these massive government interventions–from empowering judges to meddle with private contracts to backing billions in mortgage securities. This isn’t the last step. It’s the first. And you know who will end up getting screwed: The responsible and the frugal.’

    That’s hardly a revelation.

    Ever since Franklin Roosevelt’s New Deal we became and have remained a “bailout society.” Am I alone in recalling the Savings & Loan bailout from the 1980s? Or the Chrysler bailout? Or how most if not all of our Federal entitlement programs from Social Security to AFDC to Welfare to Medicare and Medicaid are “bailouts” of one form or another?

    We bail out companies, social groups, individuals, and in the case of at least Mexico, whole countries from the consequences of their own short-sightedness, greed and corruption. And we do it all by putting it on the American taxpayers’ tab (i.e., The National Debt).

    “Suck It Up” might’ve been a persuasive financial and societal prescription through the 1920s, and possibly would’ve been the better answer to the Great Depression, but that’s a moot point now. The American body politic, including the electorate as well as the politicians, has long ago rejected it in favor of Uncle Sugar’s “I feel your pain.”

    The only thing that may change that attitude will be at the point when – after the Baby Boomers have sucked it for all it’s worth – the taxpayer well runs dry. And then, instead of feeling our pain, the Feds will say to the American people: “You’re On Your Own.”

    That swinging of the social pendulum back to “Rugged Individualism” – and the Second American Revolution it will give rise to – will be “news.””

    Nope, you’re not alone.
    I remeber the savings&loan and Chysler bailouts.
    Hell, I even remember the NYCity bailout of…1976, I believe it was.

    And, you’re correct; it will be only a matter of time to the “Second American Revolution’, or what will likely be the heated-up stage of our present culture war.

36. #36
    On March 17th, 2008 at 3:22 pm, spidgy said:

    “… we could uses a man like Herbert Hoover again…”

37. #37
    On March 17th, 2008 at 3:23 pm, spidgy said:

    …use…

38. #38
    On March 17th, 2008 at 4:03 pm, rpg1616 said:

    The problem is not that the Fed let rates get too low but that they then raised them to much and too fast even though there was no real sign of inflation and they were not sufficiently taking into account the delayed effect of raising rates on adjustable rate mortgages. Then they had to suddenyl stop and lower rates in a panic but it was already too late because the inverse-bubble (snowballing of negativity) had already begun.

    I also can’t understand why people get so worked up about the falling dollar. The lower dollar only serves to make our products cheaper overseas and lower the trade deficit. If the dollar was going up and the trade deficit expanding, people would be complaining about that. The “negative savings rate” is another red herring. The problem in Japan is that they were saving too much. Consumerism drives the economy and innovation.

    What we need are lower taxes, lower interest rates, and less government meddling.

39. #39
    On March 17th, 2008 at 4:10 pm, zeestephen said:

    Michelle – Please update your Jim Cramer story ASAP – At first reading it sounds like Cramer is telling people not to sell their Bear Stearns stock – actually, he is telling people not to pull their cash deposits and stock brokerage accounts out of Bear, essentially because those things are either federally insured or not at risk even if Bear goes bankrupt – I’m a market pro, and Cramer’s language confused me, too, but if you read (listen) carefully, his actual advice is correct.

40. #40
    On March 17th, 2008 at 4:21 pm, 24Klady said:

    I’ve been trying for years to cash out most investments and simply depend, way down the road, on living off interest in retirement…well, that was a swell idea! Now the house I deligently paid off is worth a whole bunch less too…should have gone to Europe and had a good time! Bet the CEO/CFO’s at Bear Stearns never ordered in pizza just to put a few more $$’s toward the mortgage? Back to doing my taxes…

41. #41
    On March 17th, 2008 at 4:34 pm, allrsn said:

    Laugh of the day. WOW, did any of you see this post
    

    leantotheleft
    March 17, 2008 at 3:13 pm
    The right always says that the left would rather lose the war on terror than for the surge to work (and make Bush look good) My counter is that the right would rather tank the whole economy rather than to let the decision of some gov’t intervention in the marketplace be successful.

    @ http://mycowardice.wordpress.com/2008/03/17/yet-another-boo-freakin-hoo-moment

42. #42
    On March 17th, 2008 at 4:49 pm, cf said:

    So here we go again, bailout of Savings & Loan, Katrina, people who got mortgages they couldn’t pay for, financial institutions that improperly inflated their assets until the chickens came home to roost; as long as the Washington politicians do it with other people’s money, i.e. ours. When the Democrats try to raise our taxes, does anyone really believe that the Republicans (with very few exceptions) will try to stop them?

43. #43
    On March 17th, 2008 at 5:11 pm, emjem24 said:

    Unfortunately, the tale of woe that’s become Bear Stearns’ is what happens when you take on a risky business strategy (betting on the housing bubble) and losing everything when it implodes. When has it ever been a good idea to take on risky loans of the sub-prime specialty? You would think that the people in the know…aka bankers, financial analysts, etc… would have better sense then to come up with get rich ideas like this.

    The people I feel sorry for the most are the employees and shareholders at Bear Stearns who get left holding the bag. The execs will have enough millions to pad their retirement while employees (more than half of them) will be fired. Shareholders will be stuck with near worthless stock for their years of loyal investment.

    All I want to know is… who was the drunk captain of this doomed ship anyway…

44. #44
    On March 17th, 2008 at 5:14 pm, Alphonse said:

    I think it’s time for tax breaks so vigorous growth will obviate the need to pay for anything.

45. #45
    On March 17th, 2008 at 5:31 pm, RobM1981 said:

    Those who mention printing money are spot on. With the dollar already in the toilet, this rush towards “increase liquidity” is suicidal.

    When nobody wants our common and thus worthless scrip, and a gallon of gasoline costs $7, how is the poor guy who COULD afford – if just barely – that mortgage going to survive?

    How many more times will DC punish the innocent to save the guilty?

    Never mind, I’ll answer that: not too many more. The well of infinite money appears to be just about dry.

    Now tighten the money supply (or at least hold it steady), put the SOB’s who made these bad loans in jail, and let the people who borrowed money they couldn’t afford go bankrupt and live in apartments. Harsh medicine, but do you see any other way?

46. #46
    On March 17th, 2008 at 8:46 pm, Sean.Hackbarth said:

    emjem24 writes,

    All I want to know is… who was the drunk captain of this doomed ship anyway…

    He was busy playing bridge.

47. #47
    On March 17th, 2008 at 9:31 pm, PurpleHaze said:

    None of this makes any sense. Forgive me for sounding like a Ron Paul conspiracy freak but lately I’ve been starting to think that maybe, there really is more going on here than we are being led to believe.

    Uncontrolled illegal immigration.

    Providing mortgages to people who the lenders knew they could not afford.

    Allowing the dollar to collapse.

    It’s easy to say that our so-called elite (government and corporate) is stupid and/or naive. However, they wouldn’t be our so-called elite if they really were stupid and/or naive. How could smart people not have seen this coming unless there is a method to their madness?

48. #48
    On March 17th, 2008 at 9:34 pm, Ombre Rose said:

    So, the Federal Government and the Federal Reserve – a private institution masquarading to most citizens as a govt institution, now owns more real assets of American property than the private citizens, all put togehter??????

    Is that something our Founding Fathers thought was wise?

    I didn’t think so.

49. #49
    On March 17th, 2008 at 10:00 pm, Ombre Rose said:

    On March 17th, 2008 at 9:20 am, bloghooligan said:
    and the alternative was….?

    NEVER having taken us off the Gold (plus other precious…) Standard.

    NEVER having created the Fed Reserve.

    NEVER having allowed Central Banking.

    NEVER having created Income taxing and the IRS.

    John Adams – All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit, and circulation.

    Thomas A. Edison – If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way. It is absurd to say our Country can issue bonds and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the People.

    Albert Einstein – Today’s problems cannot be solved by thinking the way we thought when we created them.

    “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. – Sir Alex Fraser Tytler (1742-1813)

    John Adams – In my many years I have come to a conclusion that one useless man is a shame, two is a law firm, and three or more is a congress.

    John Adams – Because power corrupts, society’s demands for moral authority and character increase as the importance of the position increases.

    A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement.
    – Thomas Jefferson

    Karl Marx – The meaning of peace is the absence of opposition to Socialism.
    Karl Marx- My object in life is to dethrone God and destroy capitalism.

    Karl Marx – The theory of the Communists may be summed up in the single sentence: Abolition of private property.

    “Experience should teach us to be most on our guard to protect liberty when the government’s purposes are beneficent. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.”
    – Supreme Court Justice Louis Brandeis

    Ten Planks of the Communist Manifesto
    (yada yada yada…)

    Less risky bank and mortgage practices would have counted less on being able to confiscate all those mortgaged properties for themselves, and worried more about their own asset management – now, who really effectively owns all the property represented by those risky loans??

    And what manipulation was accomplished to flip Bear Stearns so quickly – one minute an anchoring structure of Wall Street, the next, a nice little pancake breakfast for some “wise entrepeneurs”.

    People watch fortunes like $300 mill disappear like paper into ash in a fire?

    Wall Street stayed uneasy watching that catastropohic event take place for all of about 4 hours??????
    Then go back to BAU?

    I’d be scared of a run, too – and wonder who deliberately set that up!

50. #50
    On March 17th, 2008 at 10:08 pm, Ombre Rose said:

    On March 17th, 2008 at 9:48 am, Sean.Hackbarth said:

    Essentially because an asset-rich company’s $50 shares were suddenly worthless JUST BECAUSE CREDITORS suddenly decided they’d rather back a $3 share JP MORGAN than the $50 share Bear Stearns company?

    Why would cash lenders do that? Everyone admits the ASSETS were THERE! to back the ORIGINAL value of the stocks.

    Plus, only a year ago, the stocks were worth close to $200 per share, If I caught Cavuto right, this afternoon???

    I mean, if these were JUNK bonds, I’d understand – they all say the HARD ASSETS were there.

51. #51
    On March 17th, 2008 at 10:24 pm, Ombre Rose said:

    Why didn’t they just freeze Stearns from off the stock market sales for a couple of weeks and let them sell some hard assets to see if they could come up to scratch – why does the govt lean THAT HARD on a private co. to force them to sell the whole biz to another private co.

    I don’t like that kind of manipulation – smacks of old time serfdoms, where the King suggests large landowner give his prize assets to a certain “friend of the court” as a free-will gift and reward for “outstanding services to the Crown” or something or other.

    I don’t like a company that will do that to another one, either.

    It isn’t as if the mortgage instruments are worthless, because the holders can always and probably should foreclose on them, and the property will retain more of its value than the Stearns’ shares did!

    Forcing a weekend panic sale is dirty.

    Look at what the govt has done with other companies that went into bankruptcy – like all the airlines!
    And let them take a year to clean up and regain their footing!

    Wasn’t the govt the ones that forced some institutions to start with subprime loans so folks who wouldn’t otherwise be able to qualify, could then buy homes???
    And didn’t a lot of banks squawk over the risky practices they were being bullied into taking, just at a point when the rules had finally be strengthened enough to make “sharking practices” “less profitable” to them???

52. #52
    On March 17th, 2008 at 10:47 pm, realitycheck said:

    …it looks to me like the Fed you and I will eventually become the largest mortgage lender in the history of the world.

    There…fixed that.

53. #53
    On March 17th, 2008 at 11:07 pm, greenLibertarian said:

    Hear, hear, Michelle, I’ve complained about the responsible being shafted for years. What astonished me was how few people seem to share those views, even among the relatively conservative engineering community of which I am a member. Or if they did share the views, they were more or less ok with being the shaftees. What will it take to wake people up, to really rouse the silent majority?

54. #54
    On March 18th, 2008 at 5:44 am, graysonret said:

    If we didn’t have that “Community Reinvestment Act” (1977), much of the problem wouldn’t exist now. Thank you Carter and Democrats! Forcing mortgage companies to invest in questionable loans was ridiculous. As long as housing prices went up, the companies could survive, but now, many have folded up. Imagine being forced to lend money to people with little money, poor credit history, and questionable jobs…. No wonder!

55. #55
    On March 18th, 2008 at 7:50 am, Prime Director said:

    “Recessions are good. They clean out the excesses, you start again from a sound foundation, and then you go again…

    …Spending all this money to prevent a recession is making it worse…

    … Listen, investment banks have been going bankrupt since the beginning of time. If people make mistakes — look, if you bail out every investment bank that gets in trouble, that’s not capitalism, that’s socialism for the rich”

    Jim Rogers

56. #56
    On March 18th, 2008 at 8:20 am, Chief RZ said:

    This is what happens when politicians attempt to play around with supply and demand. In this case, demanding that lending institutions lend money to un creditworthy people. Jimmy Carter’s foolishness and political pandering have come home to roost.

57. #57
    On September 15th, 2008 at 11:34 am, ITookTheRedPill said:

    I wasn’t registered to make comments on Michelle’s site at the time this post was written.

    But I commented over at Hot Air.