Economic Questions: Financial Meltdown, Bear Stear's JPMorgan

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I don't get all of this financial juggling Bear Stearns/JPMorgan.

Why would the Central bank (Federal Reserve?) fund 30 billion of Bear Stearns assets if the company is not worth that much? Then after the Fed makes such a move the company sells for $236.2 million? It seems to me that JPMorgan just bought 30 billion Dollars in guaranteed Federal funding plus the assets of Bear Stearns for $236.2 million.

"The central bank has agreed to fund up to $30 billion of Bear Stearns' less liquid assets." http://www.sott.net/articles/show/151228-JPMorgan-to-buy-Bear-for-2-a-share

I made a comment on and article here: http://www.sott.net/articles/show/151235-Asian-stocks-tumble-on-Bear-Stearns-news but I still don't get it. Comment:

"JPM aka JPMorgan who has roughly 124.11 billion dollars {dead-Link} in assets buys out a competitor for $236.2 million. What they bought for that price is Bear Stearns {Dead-Link} which has 3.54 billion in *market capitalization.

Going back in time to a recent oil tycoon's retirement which equaled close to or over 200 million (can't find specific article), who's getting robbed here? If I have 3.54 billion in *market capitalization, why would I sell out for $236.2 million, it makes not a shred of sense.

Not that I understand all of this but it seems like huge profiteering is going on."

(*Edited some of my comment quote. Had Dollar and changed it to Market Capitalization)


JPM aka JPMorgan who has roughly 136.78 billion in market capitalization, buys out a competitor for $236.2 million. What they bought for that price is Bear Stearns a 3.54 billion dollar company.

Going back in time to a recent oil tycoon's retirement which equaled close to or over 200 million (can't find specific article), who's getting robbed here? If I have 3.54 billion in market capitalization (<--last night, now at 578.64Million), why would I sell out for $236.2 million, it makes not a shred of sense.

Not that I understand all of this but it seems like huge profiteering is going on.

http://moneycentral.msn.com/investor/home.asp
get quote JPM = JPMorgan BSC = Bear Stearns

Apologies if all of this is confusing (it is for me!). What it looks like to me is what I said initially.

"Why would the Central bank (Federal Reserve?) fund 30 billion of Bear Stearns assets if the company is not worth that much? Then after the Fed makes such a move the company sells for $236.2 million? It seems to me that JPMorgan just bought 30 billion Dollars in guaranteed Federal funding plus the assets of Bear Stearns for $236.2 million."

Doesn't that help depreciate the value of the dollar? Isn't that less than a 1/3 of the current value of Bear Stearn stock? Isn't JPMorgan just funding itself by getting $30billion in Liquid assets based on the Fed's $30billion Stimulus into Bear Stearns?
 
It seems to me what all of this points to is the American financial system based on faith - It's worth as much as you believe it's worth.
 
telperion, i see what you're saying, but it seems as things progress it's more like it's worth nothing, no matter what we "believe" it's worth... the whole financial circus tent is about to collapse while the managers watch from the sidelines and the clowns all run around getting tangled in the cloth...
 
The way I understand it is what the Fed did was buy the securities held by Bear Stearns, which are worth only what the market will pay, but with a panicked market which doesn't know what is in those weird financial instruments they could really be worth nothing if someone doesn't step in and buy them.

Bear Stearns as a company then, has stock and has value as a company. Their stock was bought by JPMorgan Chase for $2 a share (down from around $30 on Friday and around 130 recently).

So as for this:

Noise said:
Why would the Central bank (Federal Reserve?) fund 30 billion of Bear Stearns assets if the company is not worth that much? Then after the Fed makes such a move the company sells for $236.2 million? It seems to me that JPMorgan just bought 30 billion Dollars in guaranteed Federal funding plus the assets of Bear Stearns for $236.2 million.

"The central bank has agreed to fund up to $30 billion of Bear Stearns' less liquid assets."
Click to expand...
There is a difference between what the company is worth and what their "securities" (financial instruments of different types) are worth. "Less liquid assets" is a nice way of saying "things that no one in their right mind would buy right now" Basically, the way I understand it, is the Fed stepped in and took these things off Bear's hands giving them enough cash for them to make it worthwhile for someone like JPMorgan to buy the whole thing.

I hope 1. this makes things more clear; and, 2. is accurate.

If anyone else who knows more about these things wants to elaborate or correct, please do.
 
"Give me control of a nation's money and I care not who makes it's laws."-- Mayer Amschel Bauer Rothschild

The Federal Reserve Bank is an economic control system designed to divert
human labor and creativity into the hands of a small cabal of predatory banking
dynasties. This unconstitutional system was installed in l913 with the exclusive power to creat fiat money by buying bonds from the US Treasury. Bear Stearns is one of the elite first in line predators to sell the US Treasury paper
to retail customers. These sociopathic deviants are a vast vampiric feeding
operation, a ponzi scheme of vast demensions, carrying out app. 4000 trillion
of financial transactions per year on this planet. There is about 50 trillion of goods and services to maintain humanities physical existence. The leverage
of financial transaction controls the physical well being of mankind. A few deviants, thereby reduce mankind to slavery. The rescue of Bear Stearns is
monetizing fraud at the expense of american citizens. The problem is that the
collapse of these pyramid scheme is in motion and cannot be stopped by the
hyperinflationary creation of money. The world is deleveraging debt. The result
is likely to be chaos and poverty for billions of human beings. Lord Alan Greenspan represents these elite predators behind the curtain. He is no doubt
a billionaire. Any of us could be billionaires if we had the power to creat money from nothing. He sits on the board of BIS in Switzerland which is the spider at the center of the web. Bear Sterns is bankrupt, but will be protected at the expense of humanity for the benefit of the slave masters. I cannot bring one
up to speed on this subject in a short essay. You can study if you like, but it
has taken me years with my own money on the line to comprehend the nature
of the lies surrounding money and economics.

A place to start is to view Masters of Money-How International Bankers Took Over America.
_http://video.google.com/videoplay?docid=-515319560256183936

This link discusses BIS, The Bank of International Settlements. The top
predator..
_http://www.augustreview.com/index.php?option=com_content&task=view&id=7&Itemid=4
quote
"It is not necessary to jump to conclusions as to the intent of these elite bankers, so we will instead defer to the insight of renowned Georgetown historian, Carroll Quigley:

"The Power of financial capitalism had another far reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalistic fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world's central banks, which were themselves private corporations. Each central bank, in the hands of men like Montagu Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank, sought to dominate its government by its ability to control treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence co-operative politicians by subsequent rewards in the business world."4 [Bold emphasis added]"

Now, Boris Sobolov can bring you up to side on derivatives here,
_http://video.google.com/videoplay?docid=2492293554458005955

Antal Fekete is a monetary scientist whose public work explains to the diligent
seeker, the nature on money which is the source of power and control understood by the elite oligarchs.
_http://www.financialsense.com/editorials/fekete/2007/0105.html

_http://www.barefootsworld.net/banking-fed-quotes.html

Lyndon LaRouche work looks at this system in historical and scientific context.
It is a tough read. It took me a year to comprehend his seminal work.

_http://www.larouchepub.com/lar/2008/3505hyperinflation_breakdown.html
quote
The Core of the Global Crisis
The process called "globalization," better known as a return to the Tower of Babel, has resulted in a shifting of production from regions of the world in which productive potential was relatively a highly developed feature of the characteristics of the population and its economic-cultural setting, to cheap labor working in relatively debased circumstances and cultural standards of household and community environments. The resulting shift of production from ruined areas to relatively degraded ones, has been a general lowering of the planet's overall potential relative population-density, including such examples as the increasingly murderous degeneration of the conditions of life among the population of North America and Europe. The effect is, thus, a net lowering of the sustainable level of potential relative population-density, per capita and per square kilometer, throughout the planet overall! The collapse of the physical standard of living of the population of Mexico, the U.S.A., and western Europe, now approaching catastrophic conditions, is exemplary.

This occurs at the same time, recently, that the upper strata of the population, who are chiefly worse than merely parasites, enjoy income-levels which are morally indecent in and of themselves, income-levels enjoyed solely through the savage looting of the obligations which should have been met for sustaining the general population.

If you master the above material it will be clear that as the C's noted, Economics is the control system. It enables a few STS predators to buy media, governments, academics, military and intelligence. This is the control system.
IT HAS COLLAPSED AND NOW THE QUESTION REMAINING IS WHAT WILL REPLACE IT? THAT IS TOPIC.
 
go 2 wrote: "IT HAS COLLAPSED AND NOW THE QUESTION REMAINING IS WHAT WILL REPLACE IT? THAT IS TOPIC."

It seems like Simon Davies recent article (also quoted by Donald Hunt in his column) was all too prescient and help's to answer Noise's question as well. He wrote quite a bit about where things can go from here and it's not pretty at all. I highly recommend it: http://www.sott.net/signs/list_editorials

To the point, even though the pyramid scheme may well collapse, it won't bother the predator's one bit, (quoted from the above linked article), "The rich are getting richer not through the rise in value of their assets but because they are pulling vast amounts of cash out of the system and using it to buy more and more real assets while the poor are getting poorer and everyday more people join their ranks as they desperately struggle to maintain a quality of life that is advertised via the media as the "right" of all."

Banking system collapse

When banks collapse, as they did in 1929, the entire economy collapses with them. Savings are lost (money becomes worthless), jobs are lost and only those things that are essential to survival become important and even they can become impossible to obtain and people starve. However, pay attention here: two things do not change, 1) the debts that are owed remain and 2) the assets they financed, for the most part, remain. To the extent that debt was used not to buy real things but rather for financing a certain "lifestyle", then just the debt remains with no assets connected to that debt.

These debts are legally enforceable and are historically enforced by the full weight of the law; truncheon, taser, 9mm and all. That means that you lose everything - all your assets, everything - to repay loans for money created by bankers, worth nothing in reality, but used by you to finance a certain "lifestyle" (buying an overpriced house or vehicle, take vacations, send the kids to private schools, dance lessons, etc) or perhaps just to survive.

When banks collapse, at the extreme, there is no money available. This was deliberately engineered by the Federal Reserve in 1929 as they withdrew huge sums from the banking system and only partially reversed under the New Deal. In 1929, with less money and fewer jobs even those still in employment were paid less and less until the banks seized the assets that the debt was secured on. Homes, farms, businesses, all were seized by the banks. Even seemingly large companies were bankrupted and seized by the bankers and their friends,

Conclusion

It is my conjecture based on the data I have collected that we are being set up for a total financial system collapse. The UK government has been persuaded by bankers to keep the system alive for a while longer, an act of great folly but one so well engineered that no politician could fail to fall into the trap.

The Federal Reserve would seem to be illegally and secretly supporting the US banks in a similar way."
 
Youssarian, thanks for the link to Simon Davies.
Donald Hunt said,
"What can we do? First, gather real knowledge. Then, work on creating a true will that can act upon that knowledge. Why? The elite must be preparing the lockdown as an antidote to chaos that they can see coming. (What type of chaos? This, for example.) Non-linear dynamics teach us that in chaotic periods of transition from one stable state to another, seemingly small actions can tip the balance and have profound effects on the new stable state."
 
Same thing with the bailout of Northern Rock in the UK, I do believe the figure was more than a billion dollars more than all the assets the company held.
 
One image that comes to mind with this economic collapse is of a person holding a heavy box, then bending at the waist to put it down (note: don't try this at home kids! Always bend at the knees when lifting or putting down heavy boxes!). The PTB (person) want to crash the economy (put the box on the floor). As they bend from the waist, the strength required to hold the box up increases the closer the box gets to the floor. In this way, the PTB are still exerting effort to keep the system going. Once the person is leaning at a certain angle though, it becomes impossible to hold the heavy box up. Still, one tends to exert strength until the "last minute" before dropping it, in order to ensure the box lands exactly in the spot on the floor one wishes it to land.

So, the fact that these bailouts and corporate games are going on in order to keep things going shows that the "tipping point" hasn't been reached just yet. But the lowering of the box has definitely begun, and it's just a matter of time before the decision is made to "drop it".

Well, that's my lousy box/economy analogy for the day. Tune in tomorrow for more analogies involving heavy boxes. :lol:
 
Ryan said:
But the lowering of the box has definitely begun, and it's just a matter of time before the decision is made to "drop it".
Click to expand...
A related question would be what are they waiting for then? Are they waiting for "kaboom, splat" and the related chaos for maximum "juice"?
 
I don't think so. More like they want things to turn out *exactly* the way they've planned, but the variables are so complex that it's difficult to do precisely. They probably are aware that they'll lose control of the process eventually, so they're trying to minimise the number of statistically probable outcomes into just one highly probable one that suits themselves. Mind you, a lot of the bankers and accountants probably have no clue and think that this is just a "correction" of some sort - that's due to the high-level manipulation and compartmentalization of information, not to mention the general degree of wishful thinking. We can see though that the MSM is starting to broadcast signals that something is seriously wrong, even if they aren't willing to speculate yet on how bad it will get.

We can see from history that the situation in Nazi Germany didn't get really bad until the people were screaming at their "leaders" to "do something" due to the drop in the standard of living caused by the economic crash. And of course, the Nazis provided a "solution" to the "problem" that seemed almost tailor-made for them to solve...
 
I woke in the night in the "grip" of fear, with Simon Davies conclusion in the mind.
http://www.sott.net/articles/show/149853-Reading-the-numbers

I have been working on self-observation for a number of years and just read the thread
Self Observation, Inner Talking and Work Instrument by Craig.
http://www.cassiopaea.org/forum/index.php?topic=22

I have been trying to keep the "fear" below the neck as Laura suggested. It is very
difficult. I realize that over the last few years I am like Carlos Castenada, calming myself
by filling 5 Moleskin notebooks with words and reading as much as possible on the intruding
awareness that danger approaches. I have reached the end of the line of escaping this feeling
which comes back at odd times. It is like a physical presence "gripping" my chest. I try to
experience this without comment in the mind. I can for a short while. Then I have to get up
and make hot lemonaide or read something to divert from this "grip" of
fear. It used to be anger, which felt better than fear, but this is gone and only the fear remains.
I want this to be of use. I cannot turn from or escape the fear that knowledge brings. The true horror of the situation overwhelms me for a while, until it passes only to return later. This fear and the refusal to turn
from it increases my internal conflict. It is as if an alien intrudes. Is this the "predators mind? Is this what is refered to as a program? Are their any suggestions?... as I cannot turn away, I have gone to far and run out of time!
 
That's a great analogy, actually. I'm going to have to use it.

Ryan said:
One image that comes to mind with this economic collapse is of a person holding a heavy box, then bending at the waist to put it down (note: don't try this at home kids! Always bend at the knees when lifting or putting down heavy boxes!). The PTB (person) want to crash the economy (put the box on the floor). As they bend from the waist, the strength required to hold the box up increases the closer the box gets to the floor. In this way, the PTB are still exerting effort to keep the system going. Once the person is leaning at a certain angle though, it becomes impossible to hold the heavy box up. Still, one tends to exert strength until the "last minute" before dropping it, in order to ensure the box lands exactly in the spot on the floor one wishes it to land.

So, the fact that these bailouts and corporate games are going on in order to keep things going shows that the "tipping point" hasn't been reached just yet. But the lowering of the box has definitely begun, and it's just a matter of time before the decision is made to "drop it".

Well, that's my lousy box/economy analogy for the day. Tune in tomorrow for more analogies involving heavy boxes. :lol:
Click to expand...
 
ryan said:
What, precisely, are you afraid of?
Click to expand...
I awoke experiencing fear in a physical sense, then the first thoughts in the mind were
of the collapsing economic system and the impact on the family, friends, community, and self. I
am not sure if fear proceeds the explanation or vice versa. I can think about the results
of a systemic economic collapse and the implications and not experience fear
at the time of thinking. Is it possible the emotion of fear appears from earlier thoughts?

OK, I'll try to be precise, death!
 
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