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http://online.wsj.com/article/SB120550108028136579.html?mod=hpp_us_inside_today


Bear Stearns to Get Backing
From J.P. Morgan, N.Y. Fed
Firm's Shares Sink Amid Liquidity Fears
By KEVIN KINGSBURY, ANDREW DOWELL and SERENA NG
March 14, 2008 4:16 p.m.

NEW YORK -- In an unprecedented move Friday, J.P. Morgan Chase & Co. and the Federal Reserve Bank of New York stepped in with emergency funds to keep beleaguered investment bank Bear Stearns Cos. afloat.

The move, after a week of persistent concerns about whether Bear could continue to meet its obligations, took the credit crisis to a new, more serious stage and was a reminder of how quickly an erosion of confidence can undermine even leading financial institutions.


The involvement of the Fed -- coordinating with the Treasury Department and the Securities and Exchange Commission -- made clear authorities were concerned about the risks to the broader financial system. Bear is the smallest of Wall Street's big five investment banks, but it is a significant player in markets for debt, particularly for securities backed by mortgages.

A sharp selloff in the bank's stock and demand for protection against a default on its debts showed the market isn't convinced the plan will stabilize the bank, which now faces the prospect of fighting to convince customers to stick around or finding a merger partner.

Bear Stearns' problems built this week, as counterparties in the market grew extra cautious about entering deals with the bank. Executives tried all week to reassure markets that the bank's financial position was solidOH REALLY??. But in a week that also saw the collapse of the $22 billion, mortgage-focused hedge fund Carlyle Capital, those reassurances went unheard, and Bear ultimately was forced to seek help.

"We have tried to confront and dispel these rumors and parse fact from fiction," CEO Alan Schwartz said in a release. "Nevertheless, amidst this market chatter, our liquidity position in the last 24 hours  had significantly deteriorated. We took this important step to restore confidence in us in the marketplace, strengthen our liquidity and allow us to continue normal operations."

Friday afternoon, Standard & Poor's cut its long-term credit rating on Bear Stearns by three notches to BBB and said further downgrades are likely, noting the company's liquidity squeeze.

S&P said, "Bear has been experiencing significant stress in the past week because of concerns regarding its liquidity position. Although the firm's liquidity, at the beginning of the week, held steady with excess cash of $18 billion, ongoing pressure and anxiety in the markets resulted in significant cash outflows toward the week's end, leaving Bear with a significantly deteriorated liquidity position at end of business on Thursday."

S&P said it current ratings "are based on our expectation that Bear will find an orderly solution to its funding problems. However, although we view the liquidity support to Bear as positive, we consider it a short-term solution to a longer term issue that does not entirely affect Bear's confidence crisis. We also remain concerned about Bear's ability to generate sustainable revenues in an ongoing volatile market environment."

Officials at Moody's Investors Service have also been meeting Friday to discuss whether developments at Bear Stearns require a ratings downgrade. Currently, Moody's, a unit of Moody's Corp., rates Bear debt A2, five notches above junk level and five notches below the top triple-A level.

Fed Steps In

J.P. Morgan will borrow funds from the Fed's discount window and re-lend them to Bear Stearns for 28 days, with the Fed bearing the risk of any losses. The size isn't predetermined, but is limited by the available collateral.


The arrangement employs a little-used Depression-era provision of the Federal Reserve Act. New York-based J.P. Morgan, unlike investment banks like Bear, has the advantage of being able to borrow directly from the discount window and, with just over $3 billion in write-downs thus far, has weathered the credit crisis far better than commercial banking peers like Citigroup Inc.

The timing of the move made its urgency clear. If Bear could have held out until March 27, it could have borrowed directly from the Fed itself under a new program announced just Tuesday.

The developments could mean the end of independence for Bear, founded in 1923. J.P. Morgan is "working closely with Bear Stearns on securing permanent financing or other alternatives for the company" -- Wall Street lingo for a sale or other strategic-level change -- and CNBC reported that the bank is "actively being shopped" to potential buyers. Mr. Schwartz said on a conference call that the bank is considering the full range of options.

The cost of protecting investments in Bear Stearns debt against default jumped sharply, indicating growing concerns about Bear's creditworthiness. Similar protection for other financial companies also rose in value, a sign of rising worry in the markets.

Bear's shares plunged, dropping by more than half at the day's low. Shares recently were trading nearly 42% lower at $33.07, knocking around $3 billion in market value off the stock. The options market signaled a dim outlook, with contracts giving the right to sell Bear Stearns stock for $25 soaring in value. The shares have fallen by two-thirds in the past three months.

The news also unnerved the broader markets, which just yesterday were cheering a report from Standard & Poor's that suggested the end might be in sight for write-downs related to subprime mortgages. The Dow Jones Industrial Average was down about 300 points at its low and recently was off 150 points at 11996.

U.S. Treasurys surged, as investors sought a safe place for their money, and the dollar fell.

"It's just pure fear across the board right now," said Geoffrey Yu of UBS. "All the promising news this past week has been undone over this Bear Stearns news. ... I don't think the market has seen anything of this magnitude before, such a big bank."

Bear Stearns started this week with sufficient access to cash, but persistent rumors rattled lenders, clients and counterparties, prompting a run on the bank, Mr. Schwartz said on the call.

"A lot of people wanted to get cash out," he said. "We recognized that, at the pace things were going, there could be continued liquidity demands that would outstrip our liquidity resources."

Lehman Parallels

Analysts and investors say Bear's predicament has parallels to what Lehman Brothers went through during the late 1990s.

During the credit crunch of 1998, which was sparked off by the Russian debt crisis and the implosion of hedge fund Long-Term Capital Management, Lehman was the subject of rampant market speculation that it might face financial difficulties, because it held emerging market bonds and other assets that were falling in value.

As Lehman's shares and bonds dived on the rumors, the Wall Street firm, which at the time depended heavily on short-term funding, ran into problems obtaining such financing. It fought its way out of the trap without having to turn to the Fed, however.

"The nature of financial companies is that they are pretty much a black box," says Jeff Houston, a bond fund manager at American Century Investments in San Francisco. "If people start to worry about what's in the box, there's not much the firms can do to demonstrate that they are not as weak as they appear to be."

Lehman's shares dropped 11% Friday -- outpacing declines of roughly 3% for its investment banking cohorts. The bank is bigger and more diversified than Bear geographically and across business lines, but is smaller than Goldman Sachs Group or Morgan Stanley.

Lehman said late in the day it closed a $2 billion unsecured credit line. Global Treasurer Paolo Tonucci called it "a strong signal from the market and our key bank relationships."

At the end of November, Bear had short-term borrowings of $24 billion, of which $11.6 billion was unsecured and $12.4 billion was secured. It also had $68.5 billion in long-term borrowings and $21.4 billion in cash or equivalents, according to regulatory filings.

--Greg Ip, Aaron Lucchetti, Kate Haywood, Riva Froymovich and Robert Curran contributed to this article

Write to Kevin Kingsbury at [email protected], Andrew Dowell at [email protected] and Serena Ng at [email protected]

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The bank run has started.

Coming soon to a local branch near you.

Quoted: The bank run has started. Coming soon to a local branch near you.

OH NO don't you know "It can't happen to us, we're America!"

GR

they aren't going out of business, the taxpayer will pay for them.

Fuck Bear Stearns, the lying bastards.

Only the Start.

Can someone explain to me what the hell is going on?

Tag for the carnage.

Good.

UNPOSSIBLE! The market rallied  two days straight and just yesterday I read an article that said the credit crisis was over because the big lenders were saying that they had made the last of their mortgage write downs.



So is it time to move my money into my mattress yet?

Quoted: UNPOSSIBLE! The market rallied  two days straight and just yesterday I read an article that said the credit crisis was over because the big lenders were saying that they had made the last of their mortgage write downs. So is it time to move my money into my mattress yet?

Just dont get pulled over wile transporting your "drug" money to your mattress.

Quoted: Can someone explain to me what the hell is going on?

The economy is getting ready to implode because mortgage brokers were lending hundreds of thousands of dollars a pop to known deadbeats without making them verify their income. Now the deadbeats can't pay and the domino effect is under way. The mortgage holders can't get their money from the deadbeats and the major banks that loaned money to the mortgage holders can't get their money either. The mortgages themselves have become almost worthless because housing prices are falling through the floor. Basically, money is disappearing into thin air and no one can pay back what they owe everyone else.

To top it all off the feds are trying to encourage more borrowing by printing more money and lowering interest rates. That money is becoming worthless too because foreign investors are bailing on the dollar as if it were the Titanic, and domestic investors don't know whether to shit or go blind.

That's my understanding of it.

Quoted: Quoted: Can someone explain to me what the hell is going on? The economy is getting ready to implode because mortgage brokers were lending hundreds of thousands of dollars a pop to known deadbeats without making them verify their income. Now the deadbeats can't pay and the domino effect is under way. The mortgage holders can't get their money from the deadbeats and the major banks that loaned money to the mortgage holders can't get their money either. The mortgages themselves have become almost worthless because housing prices are falling through the floor. Basically, money is disappearing into thin air and no one can pay back what they owe everyone else. That's my understanding of it.

STFU! The economy is fine!!!! sherrick13 says so!!

Quoted: DIDN'T THE CEO SAY JUST THIS WEEK THE RUMORS WERE "FALSE" THAT THEY WERE HAVING PROBLEMS? DIDN'T PAULSON SAY "It's contained"?? DIDN'T BIN BERNANKE SAY IT WAS CONTAINED?? Why does anyone believe anything else these smucks say? What a bunch of lying asshats. <snip>

Remember the other thread we were in earlier in the week....?

Quoted: Quoted: Can someone explain to me what the hell is going on? The economy is getting ready to implode because mortgage brokers were lending hundreds of thousands of dollars a pop to known deadbeats without making them verify their income. Now the deadbeats can't pay and the domino effect is under way. The mortgage holders can't get their money from the deadbeats and the major banks that loaned money to the mortgage holders can't get their money either. The mortgages themselves have become almost worthless because housing prices are falling through the floor. Basically, money is disappearing into thin air and no one can pay back what they owe everyone else. That's my understanding of it.

Actually, Bear Stearns has been a bunch of shitheads for many years now.  They have had iffy business practices for at least 8 years.  I have first hand experience with this.  They are assclowns.  Let them go down the shitter.

Quoted: Quoted: Quoted: Can someone explain to me what the hell is going on? The economy is getting ready to implode because mortgage brokers were lending hundreds of thousands of dollars a pop to known deadbeats without making them verify their income. Now the deadbeats can't pay and the domino effect is under way. The mortgage holders can't get their money from the deadbeats and the major banks that loaned money to the mortgage holders can't get their money either. The mortgages themselves have become almost worthless because housing prices are falling through the floor. Basically, money is disappearing into thin air and no one can pay back what they owe everyone else. That's my understanding of it. STFU! The economy is fine!!!! sherrick13 says so!!

The economy is fine.  I'd avoid investing in the housing/lending industry for a bit though.

Quoted: they aren't going out of business, the taxpayer will pay for them.

Yup.  I was just on my way over here to post this shit:

U.S. Stocks Fall Sharply On News of Liquidity Crisis at Bear Stearns

Bear Stearns' Big Bailout (JP Morgan + FedGov)

My Money
Friday, Mar. 14 2008
Uptick
Big Bear Scare Swallows Wall Street; Dow Dives 194 Points




Stocks sold-off today on fears about the very existence of distressed investment firm Bear Stearns, which today needed an emergency loan from the Federal Reserve Bank of New York in an extraordinary action to stave off financial ruin.

Today’s Market

The Dow Jones Industrial Average slid 194.65 points, or 1.60% to 11951.09, the Standard & Poor’s 500 index lost 27.34 points, or 2.08% to 1288.14 and the Nasdaq Composite Index dropped 51.12 points, or 2.26%, to 2212.49. The consumer-friendly Fox 50 fell 16.65 points, or 1.78%, to 916.29.

Today's sell-off means the blue-chip index nearly erased all of this week's gains, including a huge 416-point rally on Tuesday, which was its best day since 2002. While the Dow closed better than its initial 300-point decline and nearly battled back, it closed with sizable losses.

The only Dow stock that closed higher today was Boeing (BA). Reflecting the ongoing anxiety in the financial sector, the biggest decliners on the blue-chip index included Citigroup (C) and Bank of America (BAC). Also, General Motors (GM) and American Express (AXP) fell sharply as well.

The fears seeping out of the financial sector wiped out a very positive consumer inflation report. The CPI report was the most tame inflation data the market has seen in six months.

The story of the day surrounded Bear Stearns (BSC), which announced minutes before the opening bell it received an emergency 28-day loan from the Federal Reserve Bank of New York through JPMorgan Chase (JPM) to restore market confidence -- a move that amounts to a last ditch effort to stave off financial disaster. The market initially jumped on the news until it became clear just how close Bear had come to running out of cash.

Bear chief executive Alan Schwartz told analysts in a call today that the company sought out this lending because over the past week its customers and counter parties pulled their money out of the firm at an accelerated pace, most notably yesterday. "Our liquidity position in the last 24 hours had significantly deteriorated," Schwartz said in a release. The situation is so dire for Bear Stearns that JPMorgan is in talks to acquire Bear's assets, such as its building or Prime Brokerage, CNBC reported. For traders who are already very worried about the credit markets, this is very troubling news. Also, S&P downgraded Bear's credit rating to "BBB" -- two steps above junk status.

Bear lost nearly half of its value in the first 30 minutes of trading this morning to plunge to an 8 1/2-year low -- its biggest one-day drop in history. Bear Stearns lost approximately $3.1 billion in market capitalization today alone. The stock, which was worth $145 just a year ago, closed at exactly $30.00. "In a perverse way, this pledge of liquidity is sending the stock sharply lower because it raises concerns about how bad the situation is. The more help that is offered, the deeper investor concern about the extent of the problems," said Frederic Ruffy, an independent options trader.

The last time a reserve bank was forced to take such an action was the Great Depression, when it gave 125 loans to institutions hurting from that drastic economic slowdown. "The Federal Reserve is monitoring market developments closely and will continue to provide liquidity as necessary to promote the orderly functioning of the financial system," the Fed said in a statement today. The Fed Reserve said its members unanimously endorsed the emergency action taken by the regional reserve bank.

Many other financial stocks took big hits today, including Goldman Sachs (GS), Lehman Brothers (LEH) and Merrill Lynch (MER). "Market rumors of troubles at another firm are adding fuel to the fire. Investors prefer to sell first, ask questions later," said Ruffy.

Bear had denied repeated rumors about liquidity problems over the past days but the market didn't seem to completely buy the reassurances. “This just rocks the boat...When the CEO comes out and says there are no problems… they just don’t [normally] do that. He was just trying to calm [the market]," said Frank Davis, director of sales and trading at Lek Securities.

Volume on Bear today was very, very heavy, as more than 186 million shares of Bear exchanged hands. Given the volume of 1.85 billion shares on the New York Stock Exchange today, about one in every ten trades today involved shares of Bear Stearns.

Ahead of the Bear news it appeared the market was poised to open higher. Traders breathed a sigh of relief on the release of the most tame inflation data in six months -- a signal the Fed could be free to cut interest rates next week. The Department of Labor reported CPI was unchanged in February. Also, core CPI, which excludes volatile food and energy prices, came in unchanged -- lower than the 0.2% increase the market had been expecting.

“This is a great reading…Quite frankly, I’m a little incredulous but whatever the source, we will take good news right now,” John Ryding, chief U.S. economist at Bear Stearns told FOX Business this morning prior to the bailout news.

The CPI report is a rare bright spot for an economy that has dramatically slowed down and is feared to be entering a recession. It was surprising because inflation had been on a steady march upward until this report, as oil prices have soared to over $110 a barrel and prices for everything from wheat to gold have risen dramatically.  

The importance is twofold: First, inflation holding steady means consumers didn’t feel an increase in pressure from prices for goods. Consumer spending, which makes up two-thirds of the nation’s economy, has slowed considerably in recent months as individuals deal with tumbling home values, high energy costs and the ongoing credit crunch.

The market was also cheering the very surprising CPI report because it may free the Federal Open Market Committee, the Federal Reserve’s policy arm, to aggressively lower interest rates in an effort to prod the economy along. If the inflation report had rose more than anticipated, the FOMC may have been hesitant to lower rates again because it could risk fueling inflation by making money cheaper.

The good economic data wasn't able to take the market’s mind off more concerns about the tumbling dollar and the turmoil in the credit markets. Today the dollar fell below the Swiss Franc for the first time ever. Meanwhile, Carlyle Capital, a bond fund tied to the influential private-equity firm Carlyle Group, said yesterday its assets will likely be seized after failing to meet demands for more collateral on its mortgage-backed securities. However, its shares, which are traded in Amsterdam, rose sharply today on hopes the Carlyle Group will compensate the fund’s investors.

In commodity trading, oil closed lower for the first time in a week, falling 12 cents to end at $110.21 a barrel in New York. Gold gained $5.80 to $998.10 an ounce.

Corporate Movers

Washington Mutual (WM) tumbled 13%, most of it coming after Moody's cut the bank's credit rating and lowered its outlook from "stable" to "negative." Moody's said the WaMu needs to raise capital, reduce assets and cut its dividend. Over the past 52 weeks WaMu is down 70%.

Ambac Financial (ABK), the struggling bond insurer at the center of a storm, fell 5.5% despite reassuring investors today. In a recent letter to investors, CEO Michael Callen said Ambac can handle more than $15 billion of claims and has enough capital to keep its coveted "AAA" rating. Callen also said that because Ambac was never facing insolvency, it never considered a "bailout" offer.

Boeing (BA) was the lone Dow stock seeing notable gains today thank to an analyst upgrade from Morgan Stanley (MS). Analyst Heidi Wood upgraded Boeing to "overweight" from "equal weight" and increased its price target to $92. Also, the aircraft giant reported 85 new orders today, including 35 new 787 "dreamliners."

Data Dump

Consumer sentiment fell slightly in mid-March, according to a Reuters/University of Michigan report. The sentiment index registered a 70.5 reading, lower than the 70.8 reading in February but better than the 69.5 the market had been expecting.

World Markets

The Dow Jones Euro Stoxx 50, a index tracking the 50 largest companies of Europe, fell 34.73 points, or 0.96%, to 3564.85. The FTSE 100, London's benchmark index, dropped 53.60 points, or 0.94%, to 5638.80.

France's CAC 40 Index lost 38.04 points, or 0.82%, to 4592.15 and Germany's DAX slid 49.29, or 0.76%, to 6451.27

Japan's Nikkei 225 Index slid 191.84 points, or 1.54%, to 12241.84. Hong Kong's Hang Seng Index fell 64.53, or 0.29%, to 22237.11.

You would think the Market would go UP on bailout news. Why is a bailout a BAD thing to the market? If they just went TU would that be better somehow?

The reason the market went down is because they are being reminded that it's just the tip of the iceberg and it's getting tougher to describe it as merely an ice cube in your scotch!

Quoted: Quoted: Can someone explain to me what the hell is going on? The economy is getting ready to implode because mortgage brokers were lending hundreds of thousands of dollars a pop to known deadbeats without making them verify their income. Now the deadbeats can't pay and the domino effect is under way. The mortgage holders can't get their money from the deadbeats and the major banks that loaned money to the mortgage holders can't get their money either. The mortgages themselves have become almost worthless because housing prices are falling through the floor. Basically, money is disappearing into thin air and no one can pay back what they owe everyone else. To top it all off the feds are trying to encourage more borrowing by printing more money and lowering interest rates. That money is becoming worthless too because foreign investors are bailing on the dollar as if it were the Titanic, and domestic investors don't know whether to shit or go blind. That's my understanding of it.

Try not to forget that the government got us into this by getting the banks to lend more to low-income people.

Your only question is who is next. The banks and financial houses are falling apart and BSC in not the only one in need of saving. Look for Citi to go the same way unless rules are changed to allow it's major investor to own more than 4.99% of it.


update
Just hear that UBS is now in the same situation as BSC. BSC also may be bought by JP Morgan Chase. This is going to be one long weekend.

Looks like the 80s all over again.  When the banks lose, the banks win.  The banks always win.  We the taxpayers always lose.  Thanks federal government.

Quoted: Quoted: Quoted: Can someone explain to me what the hell is going on? The economy is getting ready to implode because mortgage brokers were lending hundreds of thousands of dollars a pop to known deadbeats without making them verify their income. Now the deadbeats can't pay and the domino effect is under way. The mortgage holders can't get their money from the deadbeats and the major banks that loaned money to the mortgage holders can't get their money either. The mortgages themselves have become almost worthless because housing prices are falling through the floor. Basically, money is disappearing into thin air and no one can pay back what they owe everyone else. That's my understanding of it. Actually, Bear Stearns has been a bunch of shitheads for many years now.  They have had iffy business practices for at least 8 years.  I have first hand experience with this.  They are assclowns.  Let them go down the shitter.

The "upside" to this is that I almost bought a bunch of their market analyses (with taxpayer money) earlier today, but an old friend and ex-colleague just showed up at my office door out of the blue from Denmark while I was on the phone w/ the vendor, so I told them I'd call them back next week.

Maybe the price will go down a bit and I can save the [state] taxpayers a little bit of money (on my end) that will be completely off-set by all the money the Feds spend on the other?

unless rules are changed to allow it's major investor to own more than 4.99% of it.


And who would that be again?

Quoted: Quoted: Quoted: Quoted: Can someone explain to me what the hell is going on? The economy is getting ready to implode because mortgage brokers were lending hundreds of thousands of dollars a pop to known deadbeats without making them verify their income. Now the deadbeats can't pay and the domino effect is under way. The mortgage holders can't get their money from the deadbeats and the major banks that loaned money to the mortgage holders can't get their money either. The mortgages themselves have become almost worthless because housing prices are falling through the floor. Basically, money is disappearing into thin air and no one can pay back what they owe everyone else. That's my understanding of it. STFU! The economy is fine!!!! sherrick13 says so!! The economy is fine.  I'd avoid investing in the housing/lending industry for a bit though.

Ummmm, a credit crisis is gonna affect more than that.

GR

Merrill Lynch may also suffer this week.

Nothing to worry about. Move along.

Hey Swartz! What's that going to do to your performance bonus?

Quoted: Quoted: Quoted: Quoted: Quoted: Can someone explain to me what the hell is going on? The economy is getting ready to implode because mortgage brokers were lending hundreds of thousands of dollars a pop to known deadbeats without making them verify their income. Now the deadbeats can't pay and the domino effect is under way. The mortgage holders can't get their money from the deadbeats and the major banks that loaned money to the mortgage holders can't get their money either. The mortgages themselves have become almost worthless because housing prices are falling through the floor. Basically, money is disappearing into thin air and no one can pay back what they owe everyone else. That's my understanding of it. STFU! The economy is fine!!!! sherrick13 says so!! The economy is fine.  I'd avoid investing in the housing/lending industry for a bit though. Ummmm, a credit crisis is gonna affect more than that. GR

Thats not necessarily a bad thing.

Top execs already cleaned house. Bear Stearns CEO made over $120 million over the past 5 years. So what if his stock is worthless? Who really thinks he reinvested his own income in his company.

I posted in the other thread I worked there from 1998-2001.

There are a lot of good people there that I will feel bad for, because they work very hard there and don't make the kinds of decisions that brought BS to this.
I predict JP Morgan or someone else will scoop them up for pennies on the dollar.

One thing I do like though, is Cayne (who had over a billion $ worth of BS stock before the meltdown started, will probably lose most of that paper wealth).

Look at all the action yesterday morning before the news got out.

finance.google.com/finance?client=ob&q=BSC

All the insiders unloading before the regular shmucks get the news.

Wall St. is about as trustworthy as Congress.

Quoted: Look at all the action yesterday morning before the news got out. finance.google.com/finance?client=ob&q=BSC All the insiders unloading before the regular shmucks get the news. Wall St. is about as trustworthy as Congress.

What's that hoary old expression?
Buying on Wall Street is like buying cows by candlelight?

C'mon guys, learn some economics. This is a sign that the economy is stronger than ever

Quoted: C'mon guys, learn some economics. This is a sign that the economy is stronger than ever

It will get stronger when all of the BS is cleaned out.  People need loans for houses, and because cheap borrowed money was available, it permitted people to bid up housing.  When people can't afford to pay the astronmomical housing prices, the prices will come down, but some people who bought into houses with good intent could possibly get burned, becuase there house will decrease in value also.  The speculators that bought mulitple houses on the anticipation of increasing values are going to take in the shorts, they will probably go bankrupt.

bailout on the horizon!!!
can ya hear that sucking sound yet!

Quoted: Quoted: C'mon guys, learn some economics. This is a sign that the economy is stronger than ever It will get stronger when all of the BS is cleaned out.  People need loans for houses, and because cheap borrowed money was available, it permitted people to bid up housing.  When people can't afford to pay the astronmomical housing prices, the prices will come down, but some people who bought into houses with good intent could possibly get burned, becuase there house will decrease in value also.  The speculators that bought mulitple houses on the anticipation of increasing values are going to take in the shorts, they will probably go bankrupt.

No 'could possibly' about it.

Quoted: Quoted: Quoted: C'mon guys, learn some economics. This is a sign that the economy is stronger than ever It will get stronger when all of the BS is cleaned out.  People need loans for houses, and because cheap borrowed money was available, it permitted people to bid up housing.  When people can't afford to pay the astronmomical housing prices, the prices will come down, but some people who bought into houses with good intent could possibly get burned, becuase there house will decrease in value also.  The speculators that bought mulitple houses on the anticipation of increasing values are going to take in the shorts, they will probably go bankrupt. No 'could possibly' about it.

That is unfortunate.  People never learn.  A few years back, a co-worker bought a house at the hieght of the housing boom, and then the boom turned to bust, the poor guy couldn't get a loan to re-finance his house(he loan was at something like 12% at the time) because he owed more than his house was worth.  The loan company told him that he must come up the difference between the value of his house and the amount of his loan owed.  He had to come up with something like $100,000.  I have stayed in my house for 20 years, and the value of value of my house gone up measureably in that time.

Quoted: Quoted: Quoted: Quoted: C'mon guys, learn some economics. This is a sign that the economy is stronger than ever It will get stronger when all of the BS is cleaned out.  People need loans for houses, and because cheap borrowed money was available, it permitted people to bid up housing.  When people can't afford to pay the astronmomical housing prices, the prices will come down, but some people who bought into houses with good intent could possibly get burned, becuase there house will decrease in value also.  The speculators that bought mulitple houses on the anticipation of increasing values are going to take in the shorts, they will probably go bankrupt. No 'could possibly' about it. In my situation that's OK.... And now I sit back and wonder if this is the beginning of the end   How long can the gov.org prop up these big money fatasses with the wages of the middle class?

How many times have we heard that this is the beginning of the end.  Remember back in 2001 and 2002?  This blip we are seeing is nothing compared to that.

You know it's hit the fan when the Federal Reserve pumps hundreds of billions of our dollars into the markets and financial institutions to prop them up artificially.  We already have a national debt that should be the largest in history.  This just digs the hole deeper.  Jeez,years ago it was my understanding that the U.S. was already in so much debt that we mathmatically could never pay it off(read Bankrupt).  So now I guess we are somewhere beyond bankrupt.

Quoted: You know it's hit the fan when the Federal Reserve pumps hundreds of billions of our dollars into the markets and financial institutions to prop them up artificially.  We already have a national debt that should be the largest in history.  This just digs the hole deeper.  Jeez,years ago it was my understanding that the U.S. was already in so much debt that we mathmatically could never pay it off(read Bankrupt).  So now I guess we are somewhere beyond bankrupt.

Just more reasons to keep a strong military.  Letem come get their money !!





5sub

Now, now, guys.  The smartest economists from major universities around the world are in charge.  They know what they are doing, you do not.

Now, go back to your uneducated lives, peasants errr, citizens.  

Greedy and unethical pirates like this, along with the futures speculators are ruining this country, just to make a buck.

So is it time for me to withdraw my bank account in cash, or what?


CJ

If you go get cash out of the bank before they begin to fail like the Bear/Stearn to bring home just make sure it is less than $5,000 per transaction as they call anything over that into the feds and they will probably call it drug money and come try and get you to slow down the withdrawals.It is not going to be people jumping out of windows this depression it will be two or three crooked fucks at the top of each company taking what is left.
    I am going buying a gun or two and ammo tommorrow and some staple foods and bottled water,all on credit cards,if they are all busted who will they have to come collect the money?  Financial Armageddon.........I like that line just heard on Tv

Does this mean American Idol isnt on?

Quoted: The bank run has started. Coming soon to a local branch near you.

I'd have called bullshit on you, but this week CitiBank closed my credit card account for no discernable reason.  They hold my mortgage, and I have never been late.  Never been late with a CC payment either.  I only owe 2500 on it, so it isn't a big deal.  I was declined on a purchace, and when I called I was told that Citi had closed the account.  

When I started asking why, no reason was given, but the lady said that she had been getting a lot of calls like mine...  

Shane

If they close your credit card account, do you still owe them the balance?  Do you have to continue to pay it down?  What happens?


CJ

Quoted: Quoted: The bank run has started. Coming soon to a local branch near you. I'd have called bullshit on you, but this week CitiBank closed my credit card account for no discernable reason.  They hold my mortgage, and I have never been late.  Never been late with a CC payment either.  I only owe 2500 on it, so it isn't a big deal.  I was declined on a purchace, and when I called I was told that Citi had closed the account.   When I started asking why, no reason was given, but the lady said that she had been getting a lot of calls like mine...   Shane

The same Citibank that was allowed to transfer funds from FDIC insured business units to non-FDIC insured business units, contrary to Federal Banking Regs because the SEC and FDIC thought they would go under if they didn't?

Aw hell.