<p>“Once again, the CEO’s of these companies are losing hundreds of millions out of their own pocket. Explain how they’re being bailed out. Surely selling their stock $10/share isn’t a bailout.”</p>
<p>Because if they weren’t bailed out, they would lose a lot more. ;)</p>
<p>A bailout doesn’t necessarily mean being made whole. </p>
<p>Without this bailout, Bear Stearns would be trading for 0.</p>
<p>Then there are all the companies that would be affected by Bear Stearns going under. </p>
<p>Then there are the firms like JP Morgan that are benefitting by both the Fed’s cut of interest rates, and the Bear Stearns bailout. </p>
<p>Every bank in the US is benefitting by lower rates. All the major investment houses are benefitting by lower rates. (Lower rates are very beneficial when you leverage your company 30 to 1). </p>
<p>Then there are all the companies that are benefitting by the Federal Reserve taking their crap loans as collateral.</p>
<p>But there are plenty of articles in Bloomberg, the WSJ, the NY Times, The Economist, Marketwatch, Reuters, etc. documenting what is going on right now.</p>
<p>Mini isn’t lying. I’ve been writing about this for a long time.</p>
<p>I’ve been trading professionally in the financial markets off and on for 27 years.</p>
<p>"Even as the Bush administration insists it won’t risk public funds in a bailout, American taxpayers may already be liable for billions of dollars stemming from Federal Reserve and Treasury efforts to quell a financial crisis. </p>
<p>History suggests the Fed may not recover some of the almost $30 billion investment in illiquid mortgage securities it received from Bear Stearns Cos., said Joe Mason, a Drexel University professor who has written on banking crises. Treasury’s push to have Fannie Mae and Freddie Mac buy more mortgage bonds reduces the capital the government-chartered companies hold in reserve at a time when foreclosures and defaults are surging. </p>
<p>Regulators <code>are playing with fire,‘’ said Allan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh.</code>With good luck, none of these liabilities will come due. We can’t expect that good luck, and we haven’t had it.‘’ </p>
<p>Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson were forced to respond after capital markets seized up and Bear Stearns faced a run by creditors. In an emergency action that jeopardizes the dividend it pays the Treasury, the Fed authorized a $29 billion loan against illiquid mortgage- and asset-backed securities from Bear Stearns that will be held in a Delaware corporation. JPMorgan contributed $1 billion."</p>
<p>Goldman Sachs ought to know. When you lend at a 30 to 1 ratio, a trillion dollar hit to your capital base can really curtail lending ;). Luckily some institutions are only leveraged 19 to 1 and 13 to 1.</p>
<p>"Goldman Sachs forecasts global credit losses stemming from the current market turmoil will reach $1.2 trillion, with Wall Street accounting for nearly 40 percent of the losses. </p>
<p>U.S. leveraged institutions, which include banks, brokers-dealers, hedge funds and government-sponsored enterprises, will suffer roughly $460 billion in credit losses after loan loss provisions, Goldman Sachs economists wrote in a research note released late on Monday.</p>
<p>Losses from this group of players are crucial because they have led to a dramatic pullback in credit availability as they have pared lending to shore up their capital and preserve their capital requirements, they said.</p>
<p>Goldman estimated $120 billion in write-offs have been reported by these leveraged institutions since the credit crunch began last summer."</p>
<p>laxattack- the ceo of Bears stock value plunged from 500 million to 100 million. How will he survive- at the level they deal in it is all make believe.</p>