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Old 03-17-08, 12:00 PM   #1
revolator
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Bear Stearns Opinions

Read to end:
http://news.hereisthecity.com/news/b...ews/7679.cntns
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Old 03-17-08, 12:44 PM   #2
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My take is they need to crash and burn on their own...the Fed helping them out is ridiculous.

that 30billion needs to go to education, so hopefully our kids won't speak like this "OMG HI 2 U I R SD PNDA, SRVR DIE KKTHXLA!", and hopefully says something more like "Hey, the network server died and I need it back up....thanks!"

This is exactly why we are as screwed as we are....companies are being bailed out for failing....part of a free market is if you fail, you fail and get all the pain that comes with it. Given in this case the pain is massive, but in the long run it will be better for us to have this happen, instead of rewarding poor decisions with bail-outs.
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Old 03-17-08, 12:46 PM   #3
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haha. i'm sure that last line is not too far off the mark.
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Old 03-17-08, 02:28 PM   #4
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My take is they need to crash and burn on their own...the Fed helping them out is ridiculous.

that 30billion needs to go to education, so hopefully our kids won't speak like this "OMG HI 2 U I R SD PNDA, SRVR DIE KKTHXLA!", and hopefully says something more like "Hey, the network server died and I need it back up....thanks!"

This is exactly why we are as screwed as we are....companies are being bailed out for failing....part of a free market is if you fail, you fail and get all the pain that comes with it. Given in this case the pain is massive, but in the long run it will be better for us to have this happen, instead of rewarding poor decisions with bail-outs.
it's a tough call. in theory i do agree with you. in reality, what role should the fed play if they know that a failure of this size will affect the boarder economy and hurt people that have nothing to do with this company?

afterall, i have no investments in bear stearns or any other investment bank, but if enough of them fail and tip off a huge market sell off then all of a sudden people can't retire, send their kids to a good school, or whatever.
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Old 03-17-08, 02:44 PM   #5
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Unfortunately, the Fed has to do something.

The bottom line is: they don't know how bad it is yet.

There was a line I learned in Econ 101.

"If you borrow $500,000, the bank owns you.
If you borrow $500,000,000, you own the bank."

There was so much money lent on imaginary property values, they still don't know how bad the losses will be.
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Old 03-17-08, 04:11 PM   #6
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I still think the company and it's employees should be responsible for ignoring obvious economic signs....it doesn't take a genius to notice they were investing on bubbles 5 years ago.

With my track record on announcing these crashes, maybe I should be the next Alan Greenspan. Maybe one just needs to be a big enough pessimist to see things for how they are in this economy.
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Old 03-17-08, 04:40 PM   #7
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My take is they need to crash and burn on their own...the Fed helping them out is ridiculous.
The Fed is simply trying to forestall a system-wide banking PANIC, pure and simple. This is more of a crisis of confidence than an actual fiscal meltdown, the sub-prime mess notwithstanding. If Wall Street, banks and hedge funds lose confidence in banks the entire financial system in the US could go into vapor lock out of sheer fear and paranoia. I'd say $30 billion is money very well spent in this instance. They're not bailing out Bear Stearns (ask the shareholders of common stock whose investment went from $75+ per share in October to <$3 per share today). They're bailing out EVERYBODY.
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Old 03-17-08, 05:37 PM   #8
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Run on a bank is bad. Nip it in the bud before a lot more dominoes fall. They invested in bad paper. Look at Citibank in the early 90's with an 8 dollar stock due to poor lending practices and stupid exposure.

How much was paid out in bonuses to the geniuses that run the place? It is not rocket science. It is all based on a sixth grade formula.

Ever wonder where the regulators are? No one cared so long as they got the stock price up and got the bonuses! Screw the business is the result and thus here we are now!
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Old 03-17-08, 05:55 PM   #9
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and now we're letting them use their bad paper as collateral to get another loan

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Old 03-17-08, 05:55 PM   #10
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Bank runs were one of the causes The Great Depression, and why my grandfather kept cash in paint buckets in his crawl space.

There is plenty of blame to go around. The financial institutions ignoring common sense practices (lending to qualified buyers for one, $0 down for another), the government for allowing such bone headed moves by the banks, the buyers who knowingly over borrowed so they could gamble in real estate, etc.

The Fed had to bail out (fire sale) Bears Stern, lest it lead to runs on other banks.
B.S.'s employees did pay with their jobs. They were cleaning out their desks today (Monday 17 March).

It won't be the last bailout and the powers that be will make millions on that one as well.
I've become jaded in my age. I believe the only reason for the war on terror is to make money for companies like Haliburton and The Dick Cheney. It has nothing to do with national security (we are less so because of it), nor nation building, Iraq and Afghanistan are the rubble strewn **** holes we made them.

In the same light, the real estate debacle could have been averted with common sense. Greed by the elite, because ****ing America is the easiest, sure fire way to make money there is.

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Old 03-17-08, 06:08 PM   #11
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I think Bear was a bit too intertwined with the fed to let them crash like a private company. At the same time my other says, let them pay for it.
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Old 03-17-08, 07:01 PM   #12
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God bless 'em. My JPM stock was up nearly 10% today!
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Old 03-17-08, 07:34 PM   #13
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10% a day is good, but obviously only if you bought at the absolute bottom. that 1 year chart is looking kinda ugly...like all financial stocks are.

i just started nibbling on some wells fargo. these prices are hard to resist, plus it pays dividends which is nice while you wait for better times.

my friend works at lehman brothers...which is next on the chopping block.
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Old 03-17-08, 07:40 PM   #14
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As they observed on CNBC today, the Fed is paying for the burial of Bear Stearns. That's not a bail out. What might have saved Bear would have been allowing those banks access to Fed funds for liquidity years ago (that was the major policy change they announced yesterday). Had Bear Stearns had that facility they would have never gone under, they could have borrowed billions to grease their wheels in a pinch, it all would have been paid back with interest, wouldn't have cost the taxpayers a dime. Once again our Fed appears to be a day late and a dollar long (our tax dollars of course).

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Old 03-17-08, 07:51 PM   #15
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10% a day is good, but obviously only if you bought at the absolute bottom. that 1 year chart is looking kinda ugly...like all financial stocks are.

i just started nibbling on some wells fargo. these prices are hard to resist, plus it pays dividends which is nice while you wait for better times.

my friend works at lehman brothers...which is next on the chopping block.
Well, dollar cost averaging into the ESPP, but last week as it dropped like a rock to around 37, I moved a chunk of my 401k into company stock. I imagine the market will be up tomorrow with the expected rate drop from the fed, and will move a chunk back out.

Chase has been bouncing between 40 and 45 for most of the last year and at 37 just too low. Financials have certainly taken a hit, but most of the time, it has been a write-down in assets that has lowered stock price, and not entirely based upon the current value of future earning.
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Old 03-17-08, 08:02 PM   #16
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you work at chase?
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Old 03-17-08, 08:03 PM   #17
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As they observed on CNBC today, the Fed is paying for the burial of Bear Stearns. That's not a bail out. What might have saved Bear would have been allowing those banks access to Fed funds for liquidity years ago (that was the major policy change they announced yesterday). Had Bear Stearns had that facility they would have never gone under, they could have borrowed billions to grease their wheels in a pinch, it all would have been paid back with interest, wouldn't have cost the taxpayers a dime. Once again our Fed appears to be a day late and a dollar long (our tax dollars of course).
absolutely. This wasn't an issue of corporate ineptitude that some want to blame. It is simply a liquidity issue and an investor confidence issue and if they had access to the liquidity, some of these people still wouldn't have heard of BS or what exactly they do.
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Old 03-17-08, 08:04 PM   #18
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you work at chase?
yes
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Old 03-17-08, 08:47 PM   #19
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As they observed on CNBC today, the Fed is paying for the burial of Bear Stearns. That's not a bail out. What might have saved Bear would have been allowing those banks access to Fed funds for liquidity years ago (that was the major policy change they announced yesterday). Had Bear Stearns had that facility they would have never gone under, they could have borrowed billions to grease their wheels in a pinch, it all would have been paid back with interest, wouldn't have cost the taxpayers a dime. Once again our Fed appears to be a day late and a dollar long (our tax dollars of course).

Exactly, It was a basic run on the bank and a liquidity issue mentioned previously. We are not done yet...
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Old 03-17-08, 08:57 PM   #20
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absolutely. This wasn't an issue of corporate ineptitude that some want to blame. It is simply a liquidity issue and an investor confidence issue and if they had access to the liquidity, some of these people still wouldn't have heard of BS or what exactly they do.
hmmm, letting yourself get leveraged 32:1 against hallucinated over inflated "assets" isn't ineptitude? to the point where even a minor margin call does you in with a quickness? Bear's office building is worth $1.2 billion LOL, company just got bought for like 1% of its peak value and less than its hard assets in a fire sale that is about to keep right on rockin, deflation is the ultimate beotch in the banking world.

Chase isn't in any better shape either, they are over leveraged even more last I checked, many of the big banks are, OOPS. Advantage they have is hedging subprime toxic waste isn't their prime income, but they are still exposed to enough to do them in. If you can't survive the margin calls you don't deserve to stay in business.

according to yahoo news jan 10th:
JP Morgan Chase bank
$36 trillion and change in liabilities
$628 billion in assets
58.5:1 risk ratio
Credit exposure to Risk based capital ratio of 844%
OTC derivatives 92.6%

brilliant, simply brilliant work, this will be a case study in college economic classes of how to blow it big time, leverage cuts both ways

FED has $830 billion in hard assets to put into play plus all the funny money it can print, it's gonna come up short, the $ is gonna be toilet paper
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Old 03-17-08, 09:20 PM   #21
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I think I am going to convert it to INR(INdian Ruppes) while I can
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Old 03-17-08, 09:30 PM   #22
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I think I am going to convert it to INR(INdian Ruppes) while I can
Nah - move here instead. It's fun to be paid in Chinese yuan
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Old 03-17-08, 09:36 PM   #23
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Nah - move here instead. It's fun to be paid in Chinese yuan
I bet!

But I can stay home and milk the money tho.
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Old 03-17-08, 09:53 PM   #24
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Finally a GW question that will have some significance in the future LOL
I hear the citigroup breakup is coming next.... any takers???
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Old 03-18-08, 05:09 AM   #25
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Bank behavior during the sub-prime mortgage era has been utterly unfathomable to me. A perfect example of how the market left to its own devices can become a potential disaster. It's not like the handwriting wasn't on the wall in 6' high letters. I'm no Nobel Prize economist, and I understand you can't let people who haven't really proven how much they earn to you buy $500K houses with <$20K down on rates that can increase their potential payments 50% within a couple of years. No skin in the game, no proven ability to pay, etc.

Astonishing.
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