The Reason JPMORGAN buys Bear Stearns

[Rondaben]

Very interesting....

Bear Stearns is reported to have an estimated 13.4 TRILLION dollars worth of counterparty exposure to derivatives. The Fed and Treasury essentially has guaranteed JPMorgan as much money as it needs to purchase and work out problems. Why? Bear declaring bankruptcy will cause a cascade of worldwide derivatives...on the order of $500 Trillion dollars.

Markets in Asia appear to be dropping and the dollar is down over 1 percent. Expect this to be an amazing week

[jds6958]

A week that may get its own chapter in history books to come.

[Brick]

Very interesting....

Bear Stearns is reported to have an estimated 13.4 TRILLION dollars worth of counterparty exposure to derivatives. The Fed and Treasury essentially has guaranteed JPMorgan as much money as it needs to purchase and work out problems. Why? Bear declaring bankruptcy will cause a cascade of worldwide derivatives...on the order of $500 Trillion dollars.

Markets in Asia appear to be dropping and the dollar is down over 1 percent. Expect this to be an amazing week


So the Fed is essentially buying Bear Strerns through JPMorgan. Another thread suggested that JPMorgan had lots of money in the FED or is it the other way around?

[Rondaben]

So the Fed is essentially buying Bear Strerns through JPMorgan. Another thread suggested that JPMorgan had lots of money in the FED or is it the other way around?

Good question.

When the Federal Reserve was created one of the major underwriters was JP Morgan himself. His bank was (and is) a majority stockholder in the Federal Reserve. Most people don't understand that the Federal Reserve isn't Federal at all--it is a privately owned corporation that has been given the right to print money. Thats right---the banks that own and control the Federal reserve make the rules governing banking and are also able to print all of the money necessary to effect policy.

Bear Sterns was an investment brokerage that did not have direct access to the Federal Reserve discount window (borrowing money from those who print it). They came to the Federal Reserve late last week and notified them that they were in essence bankrupt because the had no operational capital. Because they hold so much in CDOs and Derivatives the Fed could not allow it to announce bankruptcy and cause a domino effect throughout the global economy.

The Federal reserve then calls up its majority owner and tells it that there is a juicy target for purchase. JPMorgan gets the following deal:

1. Trillions of dollars of assets that will be separated into "good and bad"
2. Bad assets will be sent to the Federal reserve as "collateral" on up to $30 billion dollars of operating capital. This collateral will NEVER be redeemed and will go onto the Fed's balance sheets as defaulted debt and NOT JPMorgan's balance sheet. You the taxpayer and citizen will pay for every penny of the defaulted debt through the hidden tax of inflation---all of the billions of dollars printed to pay for this takes the value of your dollars and makes them worth less.
3. JPMorgan gets all of this for the low, low price of around $290 million. Sounds like a good deal!

To summarize, here is a story that tells you what happened:

Bob is a car dealer. He has a large dealership and has borrowed $10 million dollars to purchase cars for the lot. All of the money has gone into purchasing the vehicles. Sales are slow for a while and Bob runs out of cash to pay his workers and his business expenses.

He goes to the bank and talks to Mike. Mike sees that there are 10 million dollars worth of cars about to be defaulted on. He calls his brother Todd and tells him the situation. Mike agrees to give Todd 5 million dollars in cash and will force Bob to sell the dealership and stock to Todd for 1 million or he will foreclose on him.

Todd walks away with 10 million in inventory, 4 million in cash. The bank takes a writeoff on "bad debt" and passes the expense to all of the bank customers in the form of fees and increased credit card rates.

[HisAlways]

To summarize, here is a story that tells you what happened:

Bob is a car dealer. He has a large dealership and has borrowed $10 million dollars to purchase cars for the lot. All of the money has gone into purchasing the vehicles. Sales are slow for a while and Bob runs out of cash to pay his workers and his business expenses.

He goes to the bank and talks to Mike. Mike sees that there are 10 million dollars worth of cars about to be defaulted on. He calls his brother Todd and tells him the situation. Mike agrees to give Todd 5 million dollars in cash and will force Bob to sell the dealership and stock to Todd for 1 million or he will foreclose on him.

Todd walks away with 10 million in inventory, 4 million in cash. The bank takes a writeoff on "bad debt" and passes the expense to all of the bank customers in the form of fees and increased credit card rates.
Wow...just wow.

They must not have to take "ethics" courses at their job, like we do at mine.:heh

[icebear]

shouldn't that, like...be illegal ? :kay

[Rondaben]

Amschel Mayer Rothschild of the Rothschild Family that controls the Bank of England and was a major underwriter of the Federal Reserve along with JP Morgan and others....


“Permit me to issue and control the money of a nation, and I care not who makes its laws."

[icebear]

yeah.... i see..... :gaah

[ANewCreature]

Good question.

When the Federal Reserve was created one of the major underwriters was JP Morgan himself. His bank was (and is) a majority stockholder in the Federal Reserve. Most people don't understand that the Federal Reserve isn't Federal at all--it is a privately owned corporation that has been given the right to print money. Thats right---the banks that own and control the Federal reserve make the rules governing banking and are also able to print all of the money necessary to effect policy.

20 years earlier, either he or his father (the original died in 1913) bailed out the U.S. government during the Panic of 1893, so the family has a history of involvement with the U.S. government in a, well, intertwinned way. http://freepages.history.rootsweb.com/~dav4is/people/MORG1665.htm

[Brick]

Wow...just wow.

They must not have to take "ethics" courses at their job, like we do at mine.:heh

Ethics? Isn't that the buisness world's equivalent to the piles of brown smelly things found in cow pastures?

"Again I say to you, it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God."
Matthew 19:24