Fed aided Wall Street to avert "contagion"

Fed aided Wall Street to avert "contagion"

news.yahoo.com

WASHINGTON - The Federal Reserve was scrambling to prevent a "contagion" from infecting the nation's financial system when it took unprecedented actions to back a Bear Stearns rescue package and provide emergency loans to big Wall Street firms.

The Federal Reserve released documents Friday providing insights into its private deliberations in March that led to those controversial decisions. The Fed's actions came at a time when credit and financial problems were intensifying, thr

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Looks like they saw a big problem and tried to pump some money into it. Now let's just see if it will work...

news.yahoo.com
(visit the link for the full news article)

reply to post by TruthWithin


Seems like a pretty lame explanation for a corporate bail out...



[edit on 27-6-2008 by harvib]

Wow, now the FED freely admits to this garbage:

source:OP link

Fed Chairman Ben Bernanke and his colleagues initially moved on March 14 to provide temporary emergency financing to investment bank Bear Stearns Cos. through an arrangement with JP Morgan Chase & Co. Two days later as the investment bank teetered on the brink of bankruptcy, the Fed agreed to provide backing for up to $30 billion of a deal where JP Morgan would take over the troubled company.

Unbelieveable? Not !

Many members here have voiced their opinions on how Wall Street and the FEDS are in bed together for years, now they act like it's no big deal.

Wall Street create their own crisis, and the FED bails them out.

How many of you out there have had a situation in your own life when you could have used a bail out? Maybe we should just call ol Ben at the FED and see if he can bail us out as well.

soource:OP link
However, Bernanke has defended the actions and in appearances on Capitol Hill has said he doesn't believe taxpayers will suffer any losses.

Thanks Ben

A "contagion", huh. Well, maybe there needs to be vaccinations against this disease; nothing like some oversight backed by laws. Usually disease like this results from a bacteria of unethical actions combined with a high fever of greed.

Strange how some will argue for unprotected business intercourse, yet be the first in line to receive a "cure" after infection.

Our elected officials show their true loyalties when they sit by and allow this kind of corporate collusion to undermine the national economic landscape.

They are demonstrating that the corporate citizen is 'more equal' than other citizens. The ridiculous nature of the claim 'contagion' marks a new form of semantic bravado, where they equate near bankruptcy due to corporate profiteering and mismanagement with disease.

This goes along the same lines as the 'few bad apples' responsible for Enron and the remainder of their corporate 'alliances' when they ripped off the country by maliciously manipulating the energy market.

Oversight is an exercise in futility when the government is willing to condone 'do overs' for corporate knuckleheads who happen to travel in the same elitists circles as they do.

Truly disgusting conduct.

reply to post by Maxmars


I totally agree, but just to play devil's advocate, isn't it necessary to prevent things from getting worse? In the financial world, wouldnt Bear Sterns have more weight because they account for billions?



[edit on 27-6-2008 by TruthWithin]

reply to post by TruthWithin


I hope it's ok to jump in on this.

In the same context, if Bear Sterns is in the position to hold that kind weight of the economy, shouldn't they be held to a HIGHER standard by the FED?

It seems to me that the opposite is true.

Or am I missing something?

Absolutely- but when it comes down to push and shove - isn't it necessary to "bail' these guys out, based on the theory that if they go down, we all go down?

Originally posted by TruthWithin
reply to post by Maxmars

 

I totally agree, but just to play devil's advocate, isn't it necessary to prevent things from getting worse? In the financial world, wouldn't Bear Sterns have more weight because they account for billions?

[edit on 27-6-2008 by TruthWithin]

The reasonable side of me recognizes and even agrees that such protections are necessary, but without disclosure of where the wealth has disappeared to, we could be just throwing good money after bad.

It wouldn't be so bad if the decision to bail them out came from the government, who should be in charge of our money, but the Fed..., well, what can we say about the Fed that hasn't been beaten to death already?

I guess the crux of my dissatisfaction is that we have no real way of knowing anything about this unless the Fed deigns to grace us with their 'rationale' which they are never obliged to do, nor can we audit them, nor are they accountable in any way - even fiscally - to the US government, and by proxy, us. They don't even have to honor their own debt, go figure.

reply to post by TruthWithin


I know you are playing the devils advocate on this one and I see the FEDS explanation, to me it is like a slow death, and the ones being made to pay for their mistake are the taxpayers, due to the effects of destroying the value of the dollar, even though we are the ones the FED says they are trying to protect.

A very BIG mess to be sure.

They couldn't let Bear fail because of all the Credit Default Swaps that they held. The counterparty repercussions would have brought down the world financial system. Current Derivatives=1 Quadrillion. Thus, Lehman and Citi will be bailed out as well.

The repercussions from Inflation will make our current troubles seem like a walk in the park. Talk about a bubble, derivatives have added 500 Trillion in the last 6 months!

I'll start carving my wooden nickels now....

Utterly wrong.... Ive been saying how fubard this system is, an its ust gona get worse becuz people are too comfortable with their way.

It will bite us all back..