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(BBC)   Government to JP Morgan in 2008: Hey, could you um, buy Bear Stearns TODAY and skip all that diligence stuff cause otherwise MELTDOWN, kthanks. Government to JP Morgan 2012: Ha ha, suckers   (bbc.co.uk) divider line 38
    More: Stupid, JPMorgan Chase & Co., meltdown, Bear Stearns, collective investment scheme, Hey, bad debts, mortgage-backed securities  
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3458 clicks; posted to Business » on 02 Oct 2012 at 12:38 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



38 Comments   (+0 »)
   
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Archived thread
 
2012-10-02 12:41:14 PM  
*puts on mind reading hat* - I predict this thread will be filled with knowledgeable comments.
 
2012-10-02 12:45:05 PM  
Banksters don't owe nobody money.
 
2012-10-02 12:48:57 PM  

flucto: *puts on mind reading hat* - I predict this thread will be filled with knowledgeable comments.


That thing under warranty?
 
2012-10-02 12:51:42 PM  
Should have flushed the shiat down the toilet.
 
2012-10-02 12:53:56 PM  
yeah, because how dare we investigate the government.
 
2012-10-02 01:31:09 PM  
Aww, man. I feel so bad for them!


Said nobody, ever.
 
2012-10-02 01:48:47 PM  
NY AG's office != US Treasury.
 
2012-10-02 02:03:49 PM  
FTA:
"The securities had been widely purchased because rating agencies had mistakenly deliberately given them the highest possible credit rating."

There, fixed it for them.
 
2012-10-02 02:18:18 PM  
business and politics tabs should really be merged at this juncture
 
2012-10-02 02:41:59 PM  
JP Morgan and Banking industry to US: HAHA SUCKERS
 
2012-10-02 03:04:54 PM  
couldn't have happened to a nicer bunch :)
 
2012-10-02 03:06:01 PM  
Wait, wait, wait!

Jim Cramer said Bears Stearns is fine!
 
2012-10-02 03:18:04 PM  
You mean the Bear Stearns that JP Morgan bought for pennies on the dollar specifically because of the risk associated with their mortgage securities? Cry me a river that they don't get billions in value for free.
 
2012-10-02 03:33:40 PM  

netringer: Wait, wait, wait!

Jim Cramer said Bears Stearns is fine!


BREAKING NEWS: Jim Cramer was wrong.

/ Obvious
// If there's anything I've learned over the past 5 years of managing my own stock, it's that you're lucky to beat the market, and you probably will end up behind the big guys. Sure, some people do well, but some people also get a 21 blackjack by chance too. I'm relatively young, and I try to follow all of the prudent investment strategies, but that hasn't left me with much. As Bill Gross said, the years of significant stock market appreciation are over.
/// Yes, a little bitter. Where the fark are we supposed to grow our money if savings accounts are earning
 
2012-10-02 03:39:40 PM  

WxGuy1: netringer: Wait, wait, wait!

Jim Cramer said Bears Stearns is fine!

BREAKING NEWS: Jim Cramer was wrong.

/ Obvious
// If there's anything I've learned over the past 5 years of managing my own stock, it's that you're lucky to beat the market, and you probably will end up behind the big guys. Sure, some people do well, but some people also get a 21 blackjack by chance too. I'm relatively young, and I try to follow all of the prudent investment strategies, but that hasn't left me with much. As Bill Gross said, the years of significant stock market appreciation are over.
/// Yes, a little bitter. Where the fark are we supposed to grow our money if savings accounts are earning


The best way to make a small fortune in the stock market is to start with a large fortune.
 
2012-10-02 03:44:55 PM  

chasd00: couldn't have happened to a nicer bunch :)


What's your beef with JP Morgan?
 
2012-10-02 03:50:29 PM  
Awesome book on the subject.

House of Cards
 
2012-10-02 03:55:29 PM  

WxGuy1: /// Yes, a little bitter. Where the fark are we supposed to grow our money if savings accounts are earning



If this isn't a typo then I love the Sopranos' reference
 
2012-10-02 04:03:07 PM  

ohknaks: You mean the Bear Stearns that JP Morgan bought for pennies on the dollar specifically because of the risk associated with their mortgage securities? Cry me a river that they don't get billions in value for free.


Bingo! You buy the assets and you also get the liabilities. JP Morgan was not motivated by charity, patriotism, or any nobler virtue when they bought BS. They thought they would make a lot of money because they were buying a fundamnetally sound company that the market was forcing into a fire-sale.


They thought wrong
 
2012-10-02 04:06:22 PM  

ohknaks: You mean the Bear Stearns that JP Morgan bought for pennies on the dollar specifically because of the risk associated with their mortgage securities? Cry me a river that they don't get billions in value for free.


Privatized profits, socialized losses.
 
2012-10-02 04:28:35 PM  
I've wondeed where all those mortgage-backed securities have been hiding out.

They've ALL got to blow up sometime...
 
2012-10-02 04:39:07 PM  

HotIgneous Intruder: They've ALL got to blow up sometime...


upload.wikimedia.org
 
2012-10-02 04:54:44 PM  
While we're on the subject, if memory serves me correct, JP Morgan also forced the US taxpayer to be on the hook for the majority of the risk associated with the deal. So, double fark them.
 
2012-10-02 04:55:35 PM  
I worked for a major financial institution as a derivatives trader, and most of us guys were worried about the behaviour and nature of the CDO market and the related strategies being employed by our colleagues for a long time before it blew.

That isn't to say I agree with holding JP to account for the actions of a company it appropriated at the behest of Government influence, if said actions ceased when JP took ownership.

I wonder what will come out in the defence of JP...
 
2012-10-02 04:59:38 PM  

Deterministic: I worked for a major financial institution as a derivatives trader, and most of us guys were worried about the behaviour and nature of the CDO market and the related strategies being employed by our colleagues for a long time before it blew.

That isn't to say I agree with holding JP to account for the actions of a company it appropriated at the behest of Government influence, if said actions ceased when JP took ownership.

I wonder what will come out in the defence of JP...


Yeah, you wonder what the reaction will be the next time the govt asks a bank for a favor.
 
2012-10-02 05:30:49 PM  

netringer: Wait, wait, wait!

Jim Cramer said Bears Stearns is fine!


I was at Bear in IT for 9 years. Our CEO said the same thing, come Monday we were told most of us would be getting the high hard one.

and instead of having me transition my work elsewhere, they piled more on me until the last day and had no one to take over when I was gone.
 
2012-10-02 05:31:12 PM  

Deterministic: That isn't to say I agree with holding JP to account for the actions of a company it appropriated at the behest of Government influence, if said actions ceased when JP took ownership.


Hypothetical situation: I own a company that committed a lot of fraud, and it blows up in my face.

1) Should the company or its officers be held liable for the fraud?
2) Should the company or its officers be held liable for the fraud, if its ownership had been transferred to a third party?

Plus, JP Morgan was Bear's biggest creditor, so it probably would have had some opportunity to smell out what they were up to. I'm not going to assign them culpability based on that observation, of course.
 
2012-10-02 05:44:29 PM  

Arkanaut: Deterministic: That isn't to say I agree with holding JP to account for the actions of a company it appropriated at the behest of Government influence, if said actions ceased when JP took ownership.

Hypothetical situation: I own a company that committed a lot of fraud, and it blows up in my face.

1) Should the company or its officers be held liable for the fraud?
2) Should the company or its officers be held liable for the fraud, if its ownership had been transferred to a third party?

Plus, JP Morgan was Bear's biggest creditor, so it probably would have had some opportunity to smell out what they were up to. I'm not going to assign them culpability based on that observation, of course.


One must disaggregate the officers and those with fiduciary responsibility as well as contractual obligations from the company that acquired. I see nothing wrong with going after individuals in this case for fraud committed under the legal entity that was Bear, but holding JP to account for those actions seems wrong. Even as their creditor, they may have been able to guess what was going on, or even deduce to a fair certainty the probabilistic nature of the books and therefore balance sheet, but that analysis would be the traders and researches looking to take advantage, not the individuals responsible for the aquisition and mergin of the companies, their due diligence is a whole other game I won't even pretend to care about learning. Perhaps, they failed their responsibilities and JP may have some residual liability with regard to misleading investors, but once these events took place in exceptional circumstances, with masses of pressure from many parties. Without knowing the intricacies of US law relating to the burden of proof in a tortious matter such as this (would a reasonable person act the same?) then I can't comment with anything other than opinion.
 
2012-10-02 05:50:51 PM  

wrenchboy: WxGuy1: /// Yes, a little bitter. Where the fark are we supposed to grow our money if savings accounts are earning


If this isn't a typo then I love the Sopranos' reference


I got HTML'd and the "{less than sign here} 0.5% APY and inflation is greater than that?" got cut off. As it is, I think the unintended Sopranos reference is just as, if not more, fitting...
 
2012-10-02 06:33:20 PM  

WxGuy1: netringer: Wait, wait, wait!

Jim Cramer said Bears Stearns is fine!

BREAKING NEWS: Jim Cramer was wrong.

/ Obvious
// If there's anything I've learned over the past 5 years of managing my own stock, it's that you're lucky to beat the market, and you probably will end up behind the big guys. Sure, some people do well, but some people also get a 21 blackjack by chance too. I'm relatively young, and I try to follow all of the prudent investment strategies, but that hasn't left me with much. As Bill Gross said, the years of significant stock market appreciation are over.
/// Yes, a little bitter. Where the fark are we supposed to grow our money if savings accounts are earning


Buy an index fund. Even if you only get 3-5% your still doing better than what savings accounts are paying these days.

/not an expert
 
2012-10-02 08:06:42 PM  

Debeo Summa Credo: Deterministic: I worked for a major financial institution as a derivatives trader, and most of us guys were worried about the behaviour and nature of the CDO market and the related strategies being employed by our colleagues for a long time before it blew.

That isn't to say I agree with holding JP to account for the actions of a company it appropriated at the behest of Government influence, if said actions ceased when JP took ownership.

I wonder what will come out in the defence of JP...

Yeah, you wonder what the reaction will be the next time the govt asks a bank for a favor.


I'm not a finance or banking guy but that was my thought too. From what I understand when a bank goes under the FDIC seizes the dead bank and then sells it to another healthy bank. If this suit wins and the same principle could apply to banks seized by the FDIC then the government would be stuck with dead banks that no one wants to buy out of fear of what may have been happening or what they could be sued for.

Why not go after everyone at JP Morgan that signed a sheet of paper or made than $150,000 a year in the years leading up to the crisis.
 
2012-10-02 08:51:34 PM  

WxGuy1: netringer: Wait, wait, wait!

Jim Cramer said Bears Stearns is fine!

BREAKING NEWS: Jim Cramer was wrong.

/ Obvious
// If there's anything I've learned over the past 5 years of managing my own stock, it's that you're lucky to beat the market, and you probably will end up behind the big guys. Sure, some people do well, but some people also get a 21 blackjack by chance too. I'm relatively young, and I try to follow all of the prudent investment strategies, but that hasn't left me with much. As Bill Gross said, the years of significant stock market appreciation are over.
/// Yes, a little bitter. Where the fark are we supposed to grow our money if savings accounts are earning


Have you tried smuggling drugs up your keester?
 
2012-10-03 08:18:57 AM  

WxGuy1: /// Yes, a little bitter. Where the fark are we supposed to grow our money if savings accounts are earning


Start a business and actually create something of value? I know, crazy, right?
 
2012-10-03 09:45:07 AM  

flucto: *puts on mind reading hat* - I predict this thread will be filled with knowledgeable comments.


Will be filled with no comments. The liberal trolls on Fark don't talk about Obama's mistakes.
 
2012-10-03 11:34:40 AM  
The "government" that made that request was the Feds. The "government" backing the lawsuit is the State of New York, on behalf of the investors who got FARKED by the damage that acquisition did to their share prices.

A publicly held company has an obligation to run the company in a manner that is to the benefit of the shareholders. JP should have told the Feds to go fark themselves because it was a bad deal.
 
2012-10-03 12:00:42 PM  

Bullseyed: flucto: *puts on mind reading hat* - I predict this thread will be filled with knowledgeable comments.

Will be filled with no comments. The liberal trolls on Fark don't talk about Obama's mistakes.


Obama's mistakes? When did Bear-Stearns get bought? Who was president and treasury secretary?
 
2012-10-03 06:09:56 PM  
Wait, now the ratings agencies "mistakenly" gave AAA ratings to these securities?

/Riiiiiiiiiiight
 
2012-10-04 03:43:32 AM  

tricycleracer: WxGuy1: /// Yes, a little bitter. Where the fark are we supposed to grow our money if savings accounts are earning

Start a business and actually create something of value? I know, crazy, right?



People are poor, out of work, not buying much, but you think starting a business is a GOOD idea in this economy? Derp.
 
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