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  1. #1
    Join Date
    Jul 2008

    Banks all going down where do we put our $$$??

    Banks all going down where do we put our $$$??

    First CFC, Indymac, Bear Stearns, etc.

    Now CITI, BOA, WAMU, Wells Fargo, etc.

    Where do we put our money???

    Subprime mortgage hedge fund crisis
    Main article: 2007 subprime mortgage financial crisis
    See also: Subprime lending and Collateralized debt obligation
    On June 22, 2007, Bear Stearns pledged a collateralized loan of up to $3.2 billion to "bail out" one of its funds, the Bear Stearns High-Grade Structured Credit Fund, while negotiating with other banks to loan money against collateral to another fund, the Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund.[4] The funds were invested in thinly traded collateralized debt obligations (CDO) found to be worth less than their mark-to-model value. Merrill Lynch seized $850 million worth of the underlying collateral but only was able to auction $100 million of them. The incident sparked concern of contagion as Bear Stearns might be forced to liquidate its CDOs, prompting a mark-down of similar assets in other portfolios.[5][6] Richard A. Marin, a senior executive at Bear Stearns Asset Management responsible for the two hedge funds, was replaced on June 29 by Jeffrey B. Lane, a former Vice Chairman of rival investment bank, Lehman Brothers.[7]
    During the week of July 16, 2007, Bear Stearns disclosed that the two subprime hedge funds had lost nearly all of their value amid a rapid decline in the market for subprime mortgages.
    On August 1, 2007, investors in the two funds took action against Bear Stearns and its top management. The law firms of Jake Zamansky & Associates and Rich & Intelisano both filed arbitration claims with the National Association of Securities Dealers alleging that Bear Stearns misled investors about its exposure to the funds. This was the first legal action made against Bear Stearns, though there have been several others since then.[8]
    Co-President Warren Spector was forced to resign on August 5, 2007, as a result of errant trades that led to the collapse of two hedge funds backed primarily by subprime loans. A September 20 report in the New York Times noted that Bear Stearns posted a 61 percent drop in net profits due to their hedge fund losses.[citation needed] With Samuel Molinaro's November 15 revelation that Bear Stearns was writing down a further $1.2 billion in mortgage-related securities and would face its first loss in 83 years, Standard & Poor's downgraded the company's credit rating from AA to A.[9]
    Matthew Tannin and Ralph R. Cioffi, both former managers of hedge funds at Bear Stearns Companies, were arrested June 19, 2008. They are facing criminal charges and are suspected of misleading investors about the risks involved in the subprime market. Tannin and Cioffi have also been named in lawsuits brought forth by Barclays Bank, who claims they were one of the many investors mislead by the executives. [10] [11]
    They were also named in civil lawsuits brought in 2007 by investors, including Barclays Bank PLC, who claimed they had been misled. Barclays claimed that Bear Stearns knew that certain assets in the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund were worth much less than their professed values. The suit claimed that Bear Stearns managers devised "a plan to make more money for themselves and further to use the Enhanced Fund as a repository for risky, poor-quality investments." The lawsuit said Bear Stearns told Barclays that the enhanced fund was up almost 6% through June 2007 — when "in reality, the portfolio's asset values were plummeting." [12]

    [edit] Sale to JPMorgan Chase

    On March 14, 2008, JPMorgan Chase, in conjunction with the Federal Reserve Bank of New York, provided a 28-day emergency loan to Bear Stearns in order to prevent the potential market crash that would result from Bear Stearns becoming insolvent.[13] Two days later, Bear Stearns signed a merger agreement with JP Morgan Chase in a stock swap worth $2 a share. In addition, the Federal Reserve agreed to issue a non-recourse loan to JP Morgan Chase, thereby assuming the risk of Bear Stearns's less liquid assets. This sale price represented a staggering loss as its stock had once traded at $172 a share as late as January 2007, and $93 a share as late as February 2008. On March 20, Securities and Exchange Commission Chairman Christopher Cox said the collapse of Bear Stearns was due to a lack of confidence, not a lack of capital. Cox noted that Bear Stearns's problems escalated when rumors spread about its liquidity crisis which in turn eroded investor confidence in the firm. "Notwithstanding that Bear Stearns continued to have high quality collateral to provide as security for borrowings, market counterparties became less willing to enter into collateralized funding arrangements with Bear Stearns," said Cox. Bear Stearns' liquidity pool started at $18.1 billion on March 10 and then plummeted to $2 billion on March 13. Ultimately market rumors about Bear Stearns' difficulties became self-fulfilling, Cox said. [14]
    On March 24, 2008, a class action lawsuit was filed on behalf of shareholders, challenging the terms of JPMorgan’s recently announced acquisition of Bear Stearns.[15] That same day, a new agreement was reached that raised JPMorgan Chase's offer to $10 a share, up from the initial $2 offer. The revised deal was aimed to quiet upset investors and any subsequent legal action brought against JP Morgan Chase as a result of the deal. The Bear Stearns bailout was seen as an extreme-case scenario, and continues to raise significant questions about Fed intervention. On May 29, Bear Stearns shareholders approved the sale to JPMorgan Chase at the $10 per share price.[16]

  2. #2
    Join Date
    Dec 2014

    Re: Banks all going down where do we put our $$$??

    To some people, bankers — code word for Jewish — and guess who Obama’s assaulting? He’s assaulting bankers. He’s assaulting money people. And a lot of those people on Wall Street are Jewish. So I wonder if there’s starting to be some buyer’s remorse there

  3. #3
    Join Date
    Dec 2014

    Re: Banks all going down where do we put our $$$??

    I would highly recommend you to set aside some money for emergency purposes. We have to admit that most people live payday to payday, and there is truly no avoiding it. If we don't have enough savings to cover these emergencies, how are we about to go about then? That is why it is important to have financial goods such as payday-loans instant payday cash advances accessible for emergency situations. You can always get the cash and help pay for any financial problem you may have, and just repay it on your next paycheck. Most people would see this in a negative way but I still think that they're a great help. They're one of the things you can rely on when you have no extra cash anymore.
    Last edited by PeggieSue; 01-12-2015 at 01:24 PM.

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