Hanky-Panky On Wall Street
(Conspiracy Nation, 03/18/08) – Some information must be reasonably theorized in what follows. It is natural for people to want to know what is going on. When true information is routinely withheld and obscured, educated guesses are the next-best option. What follows is solidly based on a report in today's Wall Street Journal. Dots are connected, however, which is the best which can be done at this point in time.
Bear Stearns was under “pressure from Washington” to sell quickly to J.P. Morgan, write Robin Sidel, Greg Ip, et al. Bear Stearns thought it had 28 days to mull things over until, in a blink, it found it had only 24 hours to decide. (“The Week That Shook Wall Street: Inside the Bailout of Bear Stearns,” WSJ, 3/18/08, p. A1)
The normal rule book had been “thrown out the window.” The “Federal” Reserve began, for the first time ever, to give “loans” to investment “banks.” Security for the “loans” would be mortgage-backed assets of dubious quality. Meanwhile, the public was distracted by a passing parade of brass bands, drum majorettes, and baton twirlers accompanying Eliot Spitzer.
Cutting interest rates had not been working. There was too much “bad debt” (bad bets) out there. In the end, taxpayers could be left on the hook for losses suffered by the investment “banks”, say Sidel, Ip, et al. But Chuckie Schemer, the New York “Co-Senator”, retorts, “When you're looking into the abyss, you don't quibble over details.” The other New York “Co-Senator”, Hillary Clinton, was too busy doing job interviews for U.S. president to take an active role. Or what if Hillary Clinton is really a “gangster's moll,” a blonde babe in bed with the “big boys”?
The week-long drama began on Tuesday, March 11th. Only by invoking a “special clause” not used since the 1930s could the “Fed” lend money to investment “banks”. But the “Fed” did not want to awaken the ghost of the Great Depression. So instead, it tip-toed in by essentially agreeing to purchase junk mortgage securities for $200 billion in Treasury bonds. It is only a temporary “loan” supposedly. The first of these questionable “swaps” is set for March 27th.
That same day, March 11th, a theorized “Heist Gang” swung into action. Connecting the dots leads Conspiracy Nation to entertain Goldman Sachs, Morgan Stanley, and Credit Suisse being somehow connected to false rumors being spread about Bear Stearns. Sidel, Ip, et al. broach a different angle: Gamblers (Hedge Funds) were “short” on Bear Stearns: their chips were all stacked on the “Bear Stearns Loses” side. Wanting to hedge the hedge, the gamblers spread negative rumors. At any rate, Bear Stearns did collapse, and “Back Door Man” Ben Bernanke let in J.P. Morgan. (Background: “Pattern In 'Fed' Bail-outs?” http://www.shout.net/~bigred/PatternFed.html)
Thursday, March 13
There had been a “run” on Bear Stearns. Like a sap, the Bear turned for help to J.P. Morgan. It was like Little Red Riding Hood visiting Granny. Said Granny, “Let me contact our neutral friend, the 'Federal' Reserve.” When reached, “Back Door Man” Bernanke cajoled, “We must seek a private sector solution.” But the “private sector solution” turned out to be Granny Wolf! (“What big eyes you have, Grandma.”)
Next day, during a 5 a.m. conference call conclave, the pot was sweetened: Money was “loaned” through the J.P. Morgan/Granny Wolf conduit to investment “bank” Bear Stearns, for just 28 days supposedly. Then, that very same day, Friday, March 14th, “the old switcheroo” was sprung on the pigeon. Bear Stearns did not have 28 days! Bear Stearns had only 24 hours to sell itself to J.P. Morgan. Elsewise, all Hell would break loose. J.P. Morgan (Granny Wolf) had changed from kindly grandma to devouring carnivore!
And Granny Wolf wasn't done yet! It demanded “help” -- and got it – from “Back Door Man” Bernanke. The price per share for Bear Stearns stock was fixed at a measly $2 available to J.P. Morgan alone. No other firm can come forward and be guaranteed such a low price.
As the grizzled police sergeant says, “That's okay, Benny. You'll screw up. They always do. And when you do, I'll be around.” And sure enough, “Back Door Man” Bernanke got greedy. On behalf of the hidden owners of the “Federal” Reserve, themselves having interests in afflicted investment “banks”, the “Fed” has agreed to “lend” to any and all of the reckless institutions. Again, the “loans” will be “secured” by dubious mortgage-backed “assets.” And, add Sidel, Ip, et al., “If the assets decline in value, the Fed – and therefore the U.S. taxpayer – will bear the cost.”
Conspiracy Nation
http://www.shout.net/~bigred/cn.html