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TranceAddict Investors Club @ Marketocracy (pg. 47)
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| jerZ07002 |
| quote: | Originally posted by Groundhog Boy
So in other words, there are $30 billion dollars not going into the Treasury, which in the end, has to be made up by the taxpayers, thus costing them money. In 2006, it contributed $29 billion, so I'd say that the Bear Sterns buyout just cost at least a year's contribution. |
the fed didn't buyout anything. the fed is not in the business of giving money away. the fed provided emergency financing, which means it is lending money. When all is said and done, anything the fed lent will be returned with interest. |
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| Shakka |
| quote: | Originally posted by jerZ07002
the fed didn't buyout anything. the fed is not in the business of giving money away. the fed provided emergency financing, which means it is lending money. When all is said and done, anything the fed lent will be returned with interest. |
In order to get the deal done, the Fed had to assume the credit risk associated with Bear's illiquid assets. So in that regard, it is somewhat of a taxpayer bailout. Jamie Dimon is savvy. |
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| occrider |
| quote: | Originally posted by Shakka
In order to get the deal done, the Fed had to assume the credit risk associated with Bear's illiquid assets. So in that regard, it is somewhat of a taxpayer bailout. Jamie Dimon is savvy. |
Republican free markets ... privatize the profits, socialize the losses ;)
(yea yea I know LTC happened under clinton) |
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| Shakka |
| quote: | Originally posted by occrider
Republican free markets ... privatize the profits, socialize the losses ;)
(yea yea I know LTC happened under clinton) |
I'm waiting for them to put a hammer and sickle on the flag (to paraphrase Rick Santelli). Our free markets are currently a joke. |
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| Krypton |
| quote: | Originally posted by occrider
Republican free markets ... privatize the profits, socialize the losses ;)
(yea yea I know LTC happened under clinton) |
LOL:haha:
Let's guess what the CEO will get for running Bear Stearns into the ground...Probably a juicy severence package as always... |
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| Shakka |
| quote: | Originally posted by Krypton
LOL:haha:
Let's guess what the CEO will get for running Bear Stearns into the ground...Probably a juicy severence package as always... |
Schwartz has only been at the helm for a couple of months. Take solace in knowing that Jimmy Cayne's once billion dollar stake is now worth only a fraction of that. It does suck for the rank-and-file who worked hard to earn their options though.:( |
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| atbell |
| quote: | Originally posted by Shakka
Schwartz has only been at the helm for a couple of months. Take solace in knowing that Jimmy Cayne's once billion dollar stake is now worth only a fraction of that. It does suck for the rank-and-file who worked hard to earn their options though.:( |
Doesn't suck at all. It's a lesson for any investor, you better have a clue about what your investing in and diversify outside of your own company because if it sinks so do you.
Any buy out the CEO gets will be well merited if he keeps his mouth shut. Imagine there was no buy out and he went to the press with all the problems he knows!
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Looking at metal, go for nickel. I think there are some industry indexes out there.
I'm hearing shorts on oil that I tend to agree with. |
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| Groundhog Boy |
| quote: | Originally posted by jerZ07002
the fed didn't buyout anything. the fed is not in the business of giving money away. the fed provided emergency financing, which means it is lending money. When all is said and done, anything the fed lent will be returned with interest. |
Buyout by JPMorgan. I'd have to be living in a cave to not know that. Sorry I didn't provide enough implied adjectives. |
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| occrider |
| quote: | Originally posted by Shakka
Schwartz has only been at the helm for a couple of months. Take solace in knowing that Jimmy Cayne's once billion dollar stake is now worth only a fraction of that. It does suck for the rank-and-file who worked hard to earn their options though.:( |
Heh I think Cayne is fine. After all the entire mess didn't prevent him from partaking in the bridge tournament that weekend of. Spector should count his lucky stars he was ousted and forced to sell his stock. Yea it does suck for the rank and file though. BCS was 30% owned by employees supposedly. However, why why why would you ever consolidate your assets in that matter??? I know crazies who allocate a portion of their 401k in their company stock. Wtf if the company dies not only do you lose your job but also your stock and 401k. Wtf how is correlation not a mantra for people in this industry??? |
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| jerZ07002 |
| quote: | Originally posted by Groundhog Boy
Buyout by JPMorgan. I'd have to be living in a cave to not know that. Sorry I didn't provide enough implied adjectives. |
Well, i was only responding to your claim that somehow the taxpayers are incurring a significant (30 billion dollar) expense in this deal. I've been skiing in BC for the past week :D so i haven't read the wsj lately. However, from the limited resources i've read, the fed is extending credit to JP Morgan (with interest). So, in order for taxpayers to actually bear the burden of this, Bear Stearns and JP Morgan must both fail. A highly unlikely situation. |
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| Shakka |
| quote: | Originally posted by jerZ07002
Well, i was only responding to your claim that somehow the taxpayers are incurring a significant (30 billion dollar) expense in this deal. I've been skiing in BC for the past week :D so i haven't read the wsj lately. However, from the limited resources i've read, the fed is extending credit to JP Morgan (with interest). So, in order for taxpayers to actually bear the burden of this, Bear Stearns and JP Morgan must both fail. A highly unlikely situation. |
No--the Fed is assuming the risk associated with the illiquid assets on Bear's balance sheet (that was a sweetener that Jamie Dimon required in order to accept the deal). If those assets default, or must be written off, the Fed (and hence the taxpayers) will be the ones eating the loss--not JPM. |
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| jerZ07002 |
| quote: | Originally posted by Shakka
No--the Fed is assuming the risk associated with the illiquid assets on Bear's balance sheet (that was a sweetener that Jamie Dimon required in order to accept the deal). If those assets default, or must be written off, the Fed (and hence the taxpayers) will be the ones eating the loss--not JPM. |
I guess in a very technical sense you are correct because apparently the loan is non-recourse. However, the funding was provided to JPM for a period of 28 days on a secured basis. After that period JPM must pay the 30B to the fed or have the fed take possession of the security. I'm not aware that an announcement has been made about the value of the security; however, the fed did state that the security covers the loan. On top of that, JPM consistently deals with the Fed (because it is a commercial bank), and it is simply foolish to think that JPM will default on the loan and have the fed take possession of the security, especially considering the new credit facilities the fed has devised in recent weeks. |
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