Monday, March 31, 2008

Hold your Noses, Here Comes the Fed Again!

The J.P Morgan Chase buyout of Bear Stearns stinks to high Heaven .... here's why!

  • The Fed says that Bear Stearns (BS) was headed for bankruptcy. How strange that Bear's officers and directors received billions of dollars in bonuses just before the sale to J.P. Morgan (JPM) ... what's that strange smell?
  • Then the Fed announces that they were going to open the discount window to Goldman, Lehman, Morgan and others. But guess what? Nobody at the Fed bothered t0 tell BS ... that strange smell is getting stronger!
  • If BS was about to get vaporized, why didn't the Fed offer the $30 million dollars directly to BS as opposed to backing JPM's purchase of BS for a pittance? The straight answer is that the Fed wanted BS to go down! .... that strange smell is now becoming overpowering.
  • New York Stock Exchange rules supposedly prevent any one from buying more than 20% of a company without a shareholder vote. JPM bought 39.5% of BS without bothering to talk to the shareholders ... now that strange smell has become a stench which is wafting towards the Heavens.
  • The Fed overstepped its legal boundaries .... what else is new! It did not provide liquidity to the banking system, but rather, it went far beyond that by putting up a $30 billion dollar non recourse loan to JPM to ensure the solvency of a non-bank entity. Bear Stearns is not a bank. It's an investment (excuse me while I guffaw) bank.... the stench is almost at the Pearly Gates.
  • FYI...FYI...FYI...FYI... J.P. Morgan is the Federal Reserves largest SHAREHOLDER!!!! Oh my, you don't think that there could be any connection here do you?
  • As I have documented in my previous posts, the Fed is neither Federal nor a Reserve ... it is in fact the biggest scam of all time! .... now their stench has definately risen higher than Heaven itself.

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