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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: dara who wrote (57763)	3/20/2008 11:16:54 PM
From: GoldBull no bug here	Read Replies (1) \| Respond to of 78419

Jim Willie over at 321 has some good comments - "The other story not told is that Bear Stearns was dissolved before the wrecked investment bank had a chance to take advantage of the Term Security Lending Facility. It will be made available by the USFed at the end of March. The sleazy hogs on Wall Street wanted to remove one player at that window. The other story not told is that a liquidation of Bear Stearns would inevitably have resulted in a massive credit derivative meltdown. The consequences cannot be estimated. The derivative upside down pyramid is mammoth. No precedent exists for its partial unwind or dissolution. The pyramid holds together the entire USTreasury complex, attached to interest rate swaps, attached to credit default swaps of various types, and so on. This pyramid is leveraged 70 to 1. The talk is funny though, since the USFed has backstopped only $30 billion in Bear Stearns securities. What about the other $800 to $1500 billion rancid bonds floating within striking distance to Wall Street and major bank balance sheets? In truth, we might later learn that Bear Stearns helped to bail out JPMorgan, in helping to shore up its credit derivatives, in providing some emergency collateral, soon to bust, to prevent a JPMorgan failure!!! JPMorgan owns $7.778 trillion of credit derivatives, two and half times as much as Citigroup, the same toxic stuff that crippled Citigroup. JPMorgan skated on this one without publicity. The other story is that Bear Stearns CEO Alan Schwartz assured just last week that all was well, liquidity was adequate, and the company was in good shape. Enron CEO Ken Lay said the same thing. And lest one forgets, Enron and Bear Stearns have a common denominator in JPMorgan being a key player in the operations and agent during the demise of the two firms. JPM taught Enron everything they knew about offshore special purpose entity firms, yet they escaped all legal challenges by losing clients in court. When the USFed frees JPM from liability on any losses from collateral submitted by Bear Stearns, one has to giggle since the USFed is JPMorgan. Think consolidation of the best bond assets in JPMorgan's hands. Think more damage and consolidation upon the next victim, like Lehman Brothers. Think building the Fed Reserve bank system. The Mussolini Fascist Business Model might be opening a new chapter. "