posted on Sep, 29 2008 @ 11:18 PM
reply to post by Rockpuck
they have control of 900 billion in deposits that with what JPMorgan had and WAMU and Bear stearns combined. that makes them the largest bank by
deposits. i know they don't have the whole 900 billion on hand. most of their deposits are tied up in loans to other banks. And again their isn't
credit right now banks aren't lending any more money even to other banks. why because they are worried they won't get their money back. and they
know in the comming weeks there's going to be runs on banks.
However they had to raise the capitol to buy WAMU. they didn't have it on hand they had to discount almost 300 million shares and sell them. Yes
their market price increased after the deal. now the stock is worth less than what JPMorgan discounted it to for the sale to raise capitol.
The point is JPMorgan is taking on Assets hoping they can weather this storm and survive. and in the long term if they can survive they will come out
like bandits on the deal i have never disagreed with that.
But that long term is 5 years from now. they need to be looking at the short and mid terms. the next 1-3 years. Their is no one to loan them capitol
if they go their will be no stopping them. they can have all the assets in the world and it will act like an anchor around their neck dragging them
JPMorgan took on 170+ Billion in mortgage assets. More and more of thos assets are going to be defaulted on in the next 1-3 years. there is no market
for these assets even to repackage them. and they can't re negotiate a price on the mortgage when there is no market to set a fair market value to
those same assets. Lets face it the value of those assets sitting on those books is artificially inflated. the Market has said the prices are wrong
and the market is trying to correct it. and that what Grim fails to see.
He was banking on the bailout bill being passed, and JPMorgan would be able to dump those assets for a profit to raise capitol. Now he's to proud to
admit he said it and that he is wrong.
IF i'm wrong and JPMorgan survives i'll be the first to say i was wrong and grim was right. And i hope to god i'm wrong. Because if JPMorgan does
go then we will be headed to a depression that will make the great depression look like a recession and it will take atleast a decade to dig ourselves
out of it. plus if our economy goes so does every economy around this rock we live on.
What got us out of the great depression in the 30's? a world war. you think that won't happen again this time?