Bear Stearns was "bagged an' tagged" by the conservative elites we enjoy calling the 'Illuminati' because that is how they act. Yet we hear almost nothing from any other sources about this, just a lot of BS (like Bear Stearns initials) about a bailout justified by the prevention of a possible derivatives meltdown. This was a preventive bailout all right, but it was a forced bailout that was stuffed down the throats of Bear's board of directors and shareholders. If Bear Stearns, considered by many to be one of the best managed investment banks on Wall Street with one of the best capital positions, was on the verge of becoming bankrupt, then all the rest of its ilk are in even worse shape and will soon join them in the toxic waste graveyard unless bailed by the Fed at the taxpayers' expense. If you don't believe us, just look at Lehman Brothers most recent balance sheet and income statement if you ever have a need for some comic relief. What a joke, with only 3% write-downs on toxic waste and income generated by debt reduction on account of its most recent loss of creditworthiness from the credit-crunch and subprime debacles. Without the fictional income generated from debt write-downs on account of increasingly bad credit, they had a major loss. And if the ridiculous 3% write-downs were increased to what they really should be, Lehman would be more bankrupt than BS was even without the run on assets and the margin calls that were used to take down BS. The run on assets and margin calls that were used to force BS into a merger with JP Morgan were both orchestrated by the evil Illuminati, with the Fed paving the way by providing a thirty billion dollar non-recourse loan, collateralized by toxic waste from BS's balance sheet, to be extended by the Fed to JP Morgan to facilitate the merger. The Fed should have stayed out of non-depository banking business, but it chose instead to use convoluted powers alluded to in its charter, powers that had collected dust since the Great Depression, to bag BS. The Illuminists were enabled by the Fed's very unconventional intervention to bust BS for bowing out of the LTCM bailout. BS was ousted for refusing to play the role of buccaneer and scalawag along with other reprobate elitist denizens of the Street, as Bear attempted instead to succeed or fail on its own merits without the expectation of socialized, fascist bailouts, where the rich pilfer those of more moderate means with greedy and fraudulent schemes, only to have the very people they defrauded bail them out when their greed and fraud catch up with them. This is moral hazard on steroids.
We have some news for the Illuminati. The people are fed up with socialism for the rich, and moral hazard gone wild. We predict that a revolution is coming, so you better be careful, or you will all end up swinging at the end of a rope for treason. You will be the ones who will be "bagged an' tagged," and your media morons will be "tarred and feathered" as they watch the trap doors open.
The railroading of BS started with rumors, totally untrue, about their imminent bankruptcy. Their executives denied these rumors and went about their business thinking that nothing was wrong beyond what everyone already knew about, and we believe that these executives genuinely felt that this was the case. Little did they know. Nevertheless, the premiums on their credit default swaps skyrocketed. Then came the various major liquidation requests from clients and margin calls from banks.
The Illuminist-controlled rating agencies then threatened BS with a BBB rating. And note how this occurred before the new lending facility for dealers in government securities and the new term securities lending facility for investment banks were going to be available, either of which Fed-created bailout facility could have saved BS. Bear was forced into this merger with a gun to its head, and its directors and shareholders should be, and some are, screaming with outrage. They should be starting so many lawsuits that every securities litigation firm in Manhattan will be busy for the next decade. Forget about the directors selling 39% of shares without shareholder approval to stack the proxy deck for merger approval and avoidance of bankruptcy.
Just because they can do this does not mean that they should do this, especially if to do so would not be in the best interests of the shareholders. This sellout by the directors is subject to legal action against them for malfeasance and conspiracy to defraud shareholders as well as for a violation of just about every securities law on the books. This is a case of classic corporate piracy and the shareholders must act now to apply generous portions of shark repellant. The increased offer of $10 a share is still a pittance and they can and should get a lot more. Incidentally, the Fed bailout of BS bondholders and shareholders using what in the end will most likely be taxpayer funds is probably illegal, and the carrot of $2, and now $10 a share, on top of a complete bondholder bailout, is in essence an illegal bribe meant to get some shareholders to cave in to their coercive demands for a merger which has "illegal" and "conspiracy to defraud" written all over it.
Before the Illuminati could take down BS, they knew they had a huge obstacle to overcome. If the truth about how these firms handle leverage and risk and account for assets and losses had been brought under public scrutiny, the whole Illuminist scheme of fraud would have been exposed. Also, the entire financial system would be put at risk due to the counter party risk that would have arisen if BS went under. The demise of BS could have taken down several banks, investment banks and brokerage houses because of intertwined derivatives, and chief among the potential victims was JP Morgan, the most over-leveraged denizen of Wall Street, which naturally was chosen as the "white knight" (try "black knave") to save (try rape and pilfer) BS. This merger will put JP Morgan's notional derivative principal at 90 trillion dollars, the largest of any single US financial institution. Talk about concentration of risk and a much larger hazard of systemic failure. Where is the SEC as this new threat to the system takes on catastrophic proportions? We most certainly do not want any non-insiders in on this, do we SEC? Otherwise your agency and the Illuminati would be exposed for the frauds, dupes and malefactors they are. Any wise investor should totally dismiss and forget what any of these Wall Street pirates or government dupes at the SEC say about the overall derivative risk exposure based on some miniscule percentage of notional debt principal on Credit Default Swaps (CDS's) and notional loan principal on Interest Rate Swaps (IRS's), because these percentages are just a wild guess and even they would admit that. No one knows how a derivative meltdown would play out, but we can assure you it will be worse than whatever they tell you by at least an order of magnitude. Wait until interest rates go into double digits to stop hyperinflation and to properly price risk. Bear in mind that all the assumptions made by the so-called "experts" about potential derivative meltdown losses are based on current ludicrously low rates of interest. Double digits will vaporize those on the wrong end of IRS's and will bankrupt so many companies that there will be nary a CDS left standing that is unscathed. Once IRS's and CDS's become out of favor as a class of assets due to mounting corporate and counter party defaults, all holdings of these derivatives will suffer just as has happened with the subprime derivatives on account of mortgage defaults. CDS's insuring the debt even of strong companies will suffer.
But the IRS/CDS debacle will be far, far worse than their subprime counterpart and their meltdown will destroy the entire, worldwide financial system in a matter of months, or perhaps even a matter of weeks, who knows. The question as to the timing of the coming derivative meltdown is no longer a matter of "if," but of "when" only.