Photo credit: Aaron Kohr and Batman 2000 -Mashed up by Robin Good
WaMu. Another Mergers and Aquisitions Deal For JP Morgan Chase
JP Morgan Chase already recieved one huge payday when they snapped up Bear/Stearns for next to nothing at $2.00 a share while the Fed, with our tax dollars, covered the Bear Stearns losses for them, and now they are ready for the next identical score with WaMu. I guess it pays to have connections to the Board of the Federal Reserve.
“JPMorgan Chase has agreed to pay a minuscule $2 a share to buy all of Bear Stearns after that 85-year-old banking institution began reeling from the nation’s credit crisis - a shocking deal because it represents less than one-tenth of the firm’s market price on Friday.” Venture Beat
“As part of the JPMorgan accord announced today, the Federal Reserve has agreed to help it guarantee the Bear’s trading obligations, including fund up to $30 billionof Bear Stearns’s “less-liquid assets.” Venture Beat
Two of the wealthiest families in America own JP Morgan Chase, the Morgans and the Rockefellers. Incidentally, it was in George P. Shultz’ living room that the Vulcans met and worked for months prior to the presidential election of 2000. Shultz of course is a life-long friend and advisor to the Rockefellers. The Vulcan’s were Bush’s foreign policy advisers like Rice, Wolfowitz, Steven Hadley, G.P. Shultz, and others. Small world, huh?
There was much made of the Bear Stearns deal in the press, but they didn’t really cover the core part of the transaction; that’s the part that says JP Morgan Chase got the institution for a tenth of the market value, and even then, we had to bail them out to even further sweeten the pot. Why they didn’t just bailout Bear Stearns with the $30 billion dollars in the first place gives you a pretty good idea of what the Fed and the Treasury Department are really up to.
Right now, Washington Mutual is valued at having over $307 billion dollars in total assets, and this seizure and sell-off to JP Morgan Chase, is costing that firm only $1.9 billion.
Now you would think that would be a pretty good deal to start with, but wait, it gets better.
“U.S. taxpayers, meantime, could end up shouldering billions of dollars worth of shaky mortgages and other investments that contributed to WaMu’s demise. Such a scenario assumes the massive bailout proposed by Treasury Secretary Henry Paulson, or something like it, will be approved and JPMorgan will sell WaMu’s least desirable assets to the government.” MSNBC
The WaMu write down/bailout may cost taxpayers as much as $31 billion dollars if Sec. Paulson’s deal goes through as planned. Once again, had the Fed not seized WaMu and forced the selloff to their favorite financial institution, then WaMu could possibly have held out long enough to take advantage of the Paulson deal themselves.
Kinda makes you wonder what else will be seized with the $700 billion Paulson Plan and then handed over to JP Morgan Chase, doesn’t it?
Kevin M. Warsh was appointed to the Federal Reserve Board of Governors in 2006. His previous experience was with the Mergers and Acquisitions department of …Morgan Stanley. Morgan Stanley was founded by, you guessed it, Henry Morgan, son of J.P. Morgan of JP Morgan Chase.
There's also Ben SHALOM Bernanke who has hovered in and near federal reserve positions since 1990.
Bennie's current appointment is for FOURTEEN years, until 2020.
Plenty of time to... well, to do damn near anything.
Elizabeth Duke, who had served on the FANNIE MAE ADVISORY COUNCIL.
Randall Kroszner, who is chummy with those Israeli-Firsters at the American Enterprise Institute and a graduate of the University of Israel, AKA Harvard.
Kroszner, is a strong believer in free markets -- "a solid, conservative, Chicago school economist,"
Until the shit hits the fan, then it's time for the taxpayers to come in and scoop up the mess.
And let's not forget Donald Kohn who was been with the Fed in one capacity or another since 1970. During that time, we've had the 1980's looting of the Savings and Loan industry, the LTCM bailout in the 1990's and the current mess.
Think Donnie boy has been around long enough?
Fact Check: There are two open spots on the Federal Reserve Board of Governors.
Why?
Dunno, maybe you should ask Senator Chris Dodd who has been holding up the nomination process.
Maybe Chris was too busy raking in millions from the Securities and Investments industry, ya' think?
A grateful accounting industry showed its appreciation to Senator Dodd by contributing $345,903.00 to his campaign between 1993 and 1997. Every major accounting firm pitched in - Deloitte & Touche, Ernst & Young, Coopers & Lybrand, Peat Marwick, and Price Waterhouse.
During that same time period, Dodd also received $523,551.00 from the Securities and Investment industry, who were thrilled with other provisions of the bill which placed limitations on securities lawsuits and protected companies that had made predictions about future earnings that did not turn out to be true. Consumer groups had opposed the legislation, and the U.S. Public Interet Research Group labeling it The Crooks and Swindlers Protection Act.
But Dodd's services to Andersen didn't stop there. Every initial analysis of the Enron scandal lays much of the blame on the conflict of interest that Andersen faced in both auditing and consulting for Enron at the same time. Auditors must be independent to assure that companies do not report misleading financial data to stockholders. Once Arthur Andersen got up to $100 million a year in consulting fees from Enron, does anyone really believe that they would have blown the whistle on its shady books? But, when the S.E.C. tried to bar this conflict of interest, it was Chris Dodd who according to the Associated Press, "brokered a deal" to stop the SEC action.
As a result of Dodd's intervention, the SEC agreed not to issue a ban on the practice of auditing and consulting for the same client. Such practices have led to what Senator Barbara Boxer (D-Calif) called "the kind of hide-the-debt shell game that took place at Enron."
¤ ¤ ¤ ¤ ¤
© 2008 Greg Bacon
Source
