Quoted:
Quoted:
bailouts of Bear Sterns, Fannie, Freddie, and the subprime borrowers |
Bail out? Do you own any Bear-Sterns stock? It was purchased at $10 a share, up from the initial offer of $8 by JP Morgan. Bear Sterns is GONE.
Fannie & Freddie are having problems rasing capital since the market is running in adject fear from mortgage bonds. There is NO evidence that Freddie or Fannie have significant exposure to the sub prime fiasco but they are tarred with the same brush.
So far nothing has happened to bail out the sub prime borrowers. The bill remains stalled in congress.
If the banks would write down the loans they could be made conforming, but the banks are scared of a massive write down.
If there is any chance of a market recovery mortgage money must be available.
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The taxpayers assumed the risk of Bear Stearns assets not JP Morgan Chase. If the FED had not loaned the money the share price would have been $0. It sounds like a bailout to me. Whether Fannie and Freddie have sub-prime exposure is irrelevant. There are plans to use tax payer money to buy stock and make loans.
They may not have passed a sub-prime bailout yet, but it's only a matter of time. The two parties only disagree on small points.
If companies and people aren't allowed to make stupid decisions and fail because a nanny state government is always ready to ride to the rescue, people will take greater risks in the future.
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JP Morgan Chase assumed a huge amount of the risk.
They appear to have not had enough liquid cash, so they got some from the FED.
Bear-Sterns crashed and burned.
The ASSETS they had got spread around.
You would rather have the entire secondary market lock up?
The lock up is what caused the great depression.
Not enough cash available.
While the FED ended up with some of the poorer assets, Bear-Stearns ended up DEAD. GONE.
A huge loss to the investors, let alont eh employees.