Fed Shoveling Our Money To Thieving Banks

And you thought it was bad on Friday when the Fed gave Bear Stearns $200,000,000 of our money. Today -- a Sunday! -- they gave J.P. Morgan $30 billion, yes, $30,000,000,000 of our money to subsidize a deal to take over Bear Stearns. Public money for a private buyout. To protect the shareholders. You know the Bushies's aren't going to go back and, I don't know, bankrupt the morons who drove the company into bankruptcy. That might interrupt their time at the country club, or at the bridge tables:

Last year, when he was still chief executive of Bear Stearns Cos., James Cayne took heat for hitting the bridge circuit during troubled times for his firm. Will the same rules apply to Cayne now that he’s chairman?

We’ll soon find out. Thursday and today, as Bear fought off a pending cash crisis that threatened to ruin its business, Mr. Cayne – who relinquished his CEO title in January and become the firm’s non-executive chairman – has been in Detroit, playing in the North American Bridge Championship.

So far, he’s faring better than his firm. In the “Imp Pairs” event Thursday, Mr. Cayne and a partner placed fourth out of 130, according to figures from the American Contract Bridge League web site. (Bear shares fell 7%.) The playing took place between about 1 p.m. and 5 p.m. in the afternoon and 7:30 to 11 p.m. in the evening, say insiders – a period in which Bear CEO Alan Schwartz convened a series of conference calls with directors, according to people familiar with the matter, to discuss a pending cash pledge from J.P. Morgan Chase & Co. and the Federal Reserve Board. Still, Mr. Cayne participated in at least some of the dialogue, said one of these people.

Brings to mind Nero fiddling while Rome burns, doesn't it?

Times (uk): Bear Stearns sold to JPMorgan Chase under Federal Bank pressure

America's Federal Reserve last night orchestrated a rescue takeover of Bear Stearns, the stricken Wall Street investment bank, by JP Morgan Chase in an unprecedented move to prevent the implosion of the US financial system.

In New York last night, JP Morgan Chase announced that it is to buy Bear Stearns for $240 million in shares - representing 6 per cent of the struggling bank's closing market value on Friday, and just 1 per cent of the group's capitalisation at the beginning of the month.

As part of the deal, America's central bank has effectively underwritten $30 billion worth of Bear's toxic sub-prime mortgage-backed bonds, to protect JP Morgan Chase shareholders. It is also providing special financing to JP Morgan Chase - of an undisclosed sum. Terms of the deal are unknown, and it is not clear whether such special financing is to cover the cost of JP Morgan's emergency loan to Bear made late on Thursday night.

Greg Palast says this is why the feds really jumped all over Eliot Spitzer's bones last week. Spitzer opposed giving the robber barons free reign to bankrupt homeowners while they make billions. So he had to go:

While New York Governor Eliot Spitzer was paying an ‘escort’ $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.

This week, Bernanke’s Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks’ mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

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When the housing bubble burst and the paint flaked off, investors were left with the poop and the bankers were left with bonuses. Countrywide’s top man, Angelo Mozilo, will ‘earn’ a $77 million buy-out bonus this year on top of the $656 million - over half a billion dollars – he pulled in from 1998 through 2007.

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But there were rumblings that the party would soon be over. Angry regulators, burned investors and the weight of millions of homes about to be boarded up were causing the sharks to sink. Countrywide’s stock was down 50%, and Citigroup was off 38%, not pleasing to the Gulf sheiks who now control its biggest share blocks.

Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went bankrupt. Who? That’s Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.

The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little suffering bankers. They got the public treasure – and got to keep the Grinning’s house. There was no ‘quid’ of a foreclosure moratorium for the ‘pro quo’ of public bailout. Not one family was saved – but not one banker was left behind.

Every mortgage sharking operation shot up in value. Mozilo’s Countrywide stock rose 17% in one day. The Citi sheiks saw their company’s stock rise $10 billion in an afternoon.

And that very same day the bail-out was decided – what a coinkydink! – the man called, ‘The Sheriff of Wall Street’ was cuffed. Spitzer was silenced.

Richard Russo on Eliot Spitzer

One of my favorite authors opines on the Eliot Spitzer saga.

WaPo: Imagining Eliot

Before everything begins to unravel, Eliot confides to [Russo's fictional character who is surely himself] Rick that he's made a mess of things, betrayed everyone he loves, that he isn't even sure who he is anymore. But Rick will tell him not to be melodramatic. It's true he's made mistakes, big ones, Rick explains, but they aren't what Eliot thinks they are. Rick admits he's outraged that Eliot has spent $80,000 on prostitutes, because it shouldn't cost that much to get laid in America. It's like one of those $500 Pentagon hammers. Downright wasteful. And why order a hammer from New Jersey and pay the shipping? There are perfectly good hammers in Washington -- it's a damned city of hammers when you think about it. Where on earth did Eliot get the idea that New Jersey hammers were superior? All he wanted to do was nail something, right?

Don't joke, Eliot tells Rick. This isn't funny; he could go to jail. But to Rick's way of thinking, that's the biggest joke of all. Your average CEO can claim millions in salary and stock options in the same year his company is going down the tubes, and it's all perfectly legal. You want to know what you're really guilty of, Eliot? Cluelessness. You didn't forget who you are, you forgot where you are. This is America, pal, where you can lead the nation into war on false pretenses and be rewarded with a second term in office, but where illicit sex is and has always been an impeachable offense. (Note to self: A little of this Rick character goes a long way.)

The Immoral Crimes The Corporate Media Should Be Reporting

Ben Stechshulte for The New York Times
At Al Rawabi, an expensive nightclub in Al Hami, customers can drink imported Scotch, smoke water pipes and watch a show featuring young Iraqi woman gyrating to a 10-piece band on a garishly lighted stage.

Instead of reading saturation coverage of Eliot Spitzer's resignation for having paid sex with one sex worker, we should be reading about the real crimes taking place in the world. Here's a great take on what the media should be reporting; and not just every once in a while, but every day. Go to the original post for links to the articles documenting the facts about the Iraqis driven into prostitution by the disastrous policies of the Master of Global Disaster, George W. Bush.

Bob Fertik, Democrats.com: Bush Tied to Child Prostitution - Resignation or Impeachment Expected!

George Bush has been tied to a prostitution ring involving as many as 50,000 women and girls and is expected to resign or be impeached, according to Congressional sources.

The prostitutes, some as young as 13, are among the 1.2 million desperate Iraqis who fled to Syria after Bush's invasion of Iraq in 2003, according to the U.K. Independent.

Bush's invasion destroyed the Iraqi government and unleashed a wave of political and sectarian violence that has killed over 1 million Iraqis and forced 4 million to become refugees, according to the UN.

Facing starvation, as many as 50,000 women and girls have been forced into prostitution in Syria alone, according to Hana Ibrahim of the Women's Will Association.

"70 percent to 80 percent of the girls working this business in Damascus today are Iraqis," 23-year-old Abeer told the New York Times. "The rents here in Syria are too expensive for their families. If they go back to Iraq they'll be slaughtered, and this is the only work available."

According to the Times, "inexpensive Iraqi prostitutes have helped to make Syria a popular destination for sex tourists from wealthier countries in the Middle East. In the club's parking lot, nearly half of the cars had Saudi license plates."

Driving women and girls into prostitution violates numerous human rights agreements, including the Convention on the Rights of the Child, the Convention on the Elimination of All Forms of Discrimination Against Women, and the Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children. George Bush himself denounced sex trafficking at the United Nations in 2003.

'Sheer Hypocrisy'

Nora Ephron, HuffPo: Eliot Spitzer: The Short Goodbye

This is the problem these guys get into: they're so morally rigid and puritanical in real life (and on some level, so responsible for this priggish world we now live in) that when they get caught committing victimless crimes, everyone thinks they should be punished for sheer hypocrisy.

Of All People

New York Governor Eliot Spitzer addresses the media with his wife Silda Wall Spitzer at his office in New York, March 10, 2008.
(Shannon Stapleton/Reuters)

Eliot Spitzer? Mr. Clean? I spend a quiet afternoon in the studio & come home to the shocking news that Spitzer is named in a federal indictment as a man who was spending his hard-earned money on prostitutes. Very expensive prostitutes. (A friend noted, "He should shop around. There must be something out there for for less than that!")

Early speculation is that the investigation was triggered by suspiciously large cash transactions, that were reported by his bank to the feds. They thought he was being bribed, but he was being fluffed. (It's very hard to write about this without making bad jokes!)

The investigation is being run by Bush's politicized Justice Department. As one person noted in a comment at Harper's:

A reader emails with an interesting observation:

Amazing how Senator David Vitter’s name never leaked out of the Justice Department after the arrest of the D.C. Madam, but Eliot Spitzer’s name leaked out of the Justice Department within a week of the initial arrest in the Emperor V.I.P. case.

Vitter, recall, owned up to his dalliance with a prostitute after Hustler called him to ask for comment before publication. Not that employees of the George W. Bush Justice Department would ever act in a political fashion, of course. But it is curious.

Jane Hamsher raises more questions at firedoglake, and doesn't think this one passes the smell test. Glenn Greenwald asks, Who cares if Eliot Spitzer hires prostitutes?

I'd like to note that the Bush/Cheney cabal has been screwing all of us for seven years, and we're not getting paid, they are! And they're leaving us with a huge bill, and the streets are littered with the broken bodies of veterans and Iraqis maimed in their immoral war. Those are the people who should be prosecuted, not some poor schmuck getting his shaft waxed.

Initial reports were that Spitzer would announce his resignation at 7:00 p.m. but he didn't. I hope he doesn't. If it's just sex, who cares. Maybe someday the American people will grow up and there will be a book for adults like the popular kids book, "Everyone Poops". Everybody fucks. Get over it.