Author Topic: This Absolutely Amazes Me! … Several Forum Members Made Excellent  (Read 1178 times)

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Offline boomerkel

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This Absolutely Amazes Me! … Several Forum Members Made Excellent posts to the Fianacial Forum and very few forum members have read their posts.

Here are those posts:

Neo … The Unrest Is Brewing: Homeowners Protest JP Morgan & Bear Stearns On Bailout … Read 24 times

bigron … "Bernankerupted”: Bear Stearns Fire-sale sends Global Markets Plunging … Read 21 Times

monkeyboy … JPMorgan to buy Bear Stearns for $2 a share … Read 29 times

MikiQuick123 … Bear Sterns Chairman Sells $61.3 mils. of Stock … Read 29 times

All forum members and Guest should read these posts!


I would like to bring up a very important point that most people are unaware of.

Hedge Funds that acquired these SIVS walked them into the Bank of Japan and said “I would like to put these wonderful instruments (SIVS) up as collateral and will you loan me 10 times their value?” … Bank of Japans response … “Absolutely, may be will loan you 20 times there value!”

Have you heard of the “Carry Trade”?

Each downward tick in the value of residential and/or commercial property increases that leverage exponentially.

"SIV-lites are packages of asset-backed securities that are used as collateral to raise money in the commercial paper market. They are often leveraged by between 40 and 70 times." as quoted from Barclays steps in with $1.6bn injection for struggling SIV-lite fund


Excerpts from Dollar tumble spells trouble for yen trade

"The carry trade, which involves cheaply borrowing the Japanese currency to buy other assets, comes unstuck in volatile currency markets. If the carry trade does implode, sending the yen to new heights against a wide basket of currencies, dealers say that the cast of victims could include individuals, corporates and hedge funds."
   
"Hedge funds have long used the carry trade for cheap leverage, but there are also thought to be vast exposures to yen volatility in the Thai, Korean and Indonesian banking sectors, where the Japanese currency has been borrowed heavily to meet funding needs."   

"But the practice is also uniquely sensitive to general global risk appetites: when investors batten down the hatches, as they have done in the wake of the Bear Stearns collapse, the carry trade unwinds, often spectacularly."



"So, it looks like Bear will be just the first of many over-leveraged investment banks on their way to the chopping block."

"I believe that banking institutions are more dangerous to our liberties than standing armies." ... Thomas Jefferson

Offline boomerkel

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Re: This Absolutely Amazes Me! … Several Forum Members Made Excellent
« Reply #1 on: March 29, 2008, 03:58:01 pm »


I failed to mention one of the most important points related to why JP Morgan and the Federal Reserve moved very quickly to take over Bear Stearns.

There is a lot more behind there reasoning not to let Bear Stearns go into bankruptcy!

Do you remember when REFCO went into bankruptcy?

What did the Judge do subsequent to the bankruptcy filing?

Here are a few quotes from an article posted on TheStreet.com ...

"To date, the names of the financial institutions holding roughly $1 billion of Bawag's U.S. assets have remained a secret, even though the Austrian bank has since agreed to pay nearly $700 million in restitution to federal prosecutors, Refco's creditors and the defunct brokerage's shareholders. The bankruptcy judge overseeing the liquidation of Refco directed the creditors to file the names under seal."

"Some of the big banks asked to put a hold on Bawag's assets were ABN Amro (ABN) , Bank of New York (BK), Bear Stearns (BSC), Citigroup (C), Deutsche Bank (DB), J.P. Morgan Chase (JPM), Merrill Lynch (MER) and Wachovia (WB). Lesser-known financial institutions that received freeze notices included the New York branch of Europe's Erste Bank, LH Financial Services, Merriman Curhan Ford, Westminster Securities, hedge fund administrator DPM Mellon and Ivy Maplewood Associates II, a hedge fund run by Ivy Asset Management."


The entire article can be read here ... Tracking the Bawag Scavenger Hunt

HUM  ::) ... WHY WOULD THE BANKRUPTCY JUDGE DIRECT THE CREDITORS TO FILE NAMES UNDER SEAL ???

Naked Short Selling ... and a whole lot of it!

"October 27, 2005 (FinancialWire) According to Financial Times, the $10,590,379,000 securities sold, not yet purchased line item in the Refco (NYSE: RFX) bankruptcy balance sheet is not only naked short selling, it is under intense investigation by authorities." ... See my next post for the full article.

Bear Stearns was a very appropriate name as they were Masters of Bear Raids against innocent public companies!

"I believe that banking institutions are more dangerous to our liberties than standing armies." ... Thomas Jefferson

Offline cueball7

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Re: This Absolutely Amazes Me! … Several Forum Members Made Excellent
« Reply #2 on: March 29, 2008, 05:41:33 pm »

Good post Boomer-

I don't think we have begun to scratch the surface of this financial debacle. Rules that you and I play by doesn't seem to apply to wallstreet. Being a big believer in Karma-all I can say is what goes around comes around. Just wouldn't want to see people offing themselves like many brokers did in 1929, over f**king money-worthless paper!