Jamie Dimon Laughs About Buying Bear Stearns For $2 Bucks Per Share With Taxpayer Help (Charlie Rose Video)

Archive Video - Jamie Dimon CEO of JPMorgan with Charlie Rose - July 2008

What Dimon doesn't mention is the $29 billion subsidy provided by the Federal Reserve now called Maiden Lane I.  Without the taxpayer gift, the deal doesn't happen, and Bear Stearns creditors (bank bondholders) would have been forced to take a massive and deserved haircut. 

But that's where Tim Geithner, Henry Paulson and Ben Bernanke stepped in with a boatload of cash from taxpayers.  The end result, as Alan Grayson explained last week, is that we (via the Fed) now own Red Roof Inns, just one of many commercial real-estate miracles of excess clogging the books of Maiden Lane.

• "I don't think Bear Stearns could have survived Monday in any event, for any reason at all.  I'm telling you they would have been bankrupt Monday morning."

• "Buying a house and buying a house on fire are two different things."

And the audience roars in idiotic approval because they were watching Dancing with the Stars every night that month and missed the Bear Stearns implosion.

Comments

[DailyBail]

Stories on bank bondholders...

http://dailybail.com/home/william-buiter-says-bank-bondholders-must-be-held-accountabl.html

Discussion Of Bank Bondholders Vs. Taxpayers With Felix Salmon, Brad Delong, James Kwak (And The Daily Bail)

http://dailybail.com/home/no-need-to-bailout-seeking-alpha-discussion-of-bank-bondhold.html

[DailyBail]

Why Paul Krugman, James Galbraith, Simon Johnson and John Hussman are right and Brad Delong, Tim Geithner and Lawrence Summers are clueless eunuchs. The issue is Treasury Secretary Geithner's solution to the banking crisis revealed this morning, which by the way falls entirely on you. Bank bondholders like Bill Gross are not even being asked to carry their own tampons.

The mother of all bailouts is really the mother of all uncloggings.

My argument with Brad Delong's thesis is simple. He doesn't give enough consideration to the probability that the price paid for bank assets will be too high. The entire plan is built upon non-recourse loans to the private sector. Bill Gross puts down 8% ( or is it 3% ), you and I put up the remaining 92%.

http://dailybail.com/home/the-great-unclog-of-2009-industrial-strength-drano-anyone.html

[DailyBail]

The pink elephant is still the discussion of bondholders vs. taxpayers. I would feel somewhat better if I could at least hear Geithner's reasoning.

Today's interview demonstrates one of the reasons Erin Burnett is so weak at her job. She had the opportunity to discuss this construct with TG today and never went near it.

Getting TG to explain to taxpayers why GM bondholders are getting torched while bank bondholders ride the A-train should have been the main focus of her interview.

C'mon Erin. At least get the guy on record with an explanation.

The opportunities do not come often and she blew it. It's the single most important philosophical question of the entire plan and she whiffed.

http://dailybail.com/home/bank-bailout-news-complete-video-and-transcript-of-tim-geith.html

[Zarathustra]

In the clip (have not seen entire interview), he fails to mention that the U.S. government told him that he "needed to” do this deal (at $2 at $10 a share) or he would lose the support of the government as a bailout backstop as set up by the Central Bank. Don't get me wrong, I am in the Jim Roger's camp. Rogers said they should have failed if they could not survive (no bailouts, no help, no pass) the crash so that the smaller, more competent banking institutions who were responsible and well managed could buy up the scraps for well deserved growth and profits. The incompetent get sent to financial rehab and the competent take over. No doubt, for a short period in time, they all had each other by the balls in the panic. The Central Bank in the process approved every transaction and agreement. The Group of Thirty (basically the think tank and enforcer of the Central Bank) had already laid out a plan of attack to better regulate the big financial institutions and put them firmly under their thumb. The fact that the bill went to the sovereign nations was part of the plan to help the Central Bank (and its very secretive owners) get the governments back under their rigid control. They do this by wars, by manipulating and controlling politicians (Volcker over Obama) and by financial collapse and restructuring. This dude, Jamie Dimon, is ARod playing for the right team at the right time. A-Rod is often called A-Fraud by teammates and those in the know. He is just a lucky SOB (no, not short of breath). The only way to fix this problem now is a clawback of Madoff proportions, yes, down to his crystal stemware and wife’s overpriced bric-a-brac. Oh yeah, and all the shit that rolled down the Madoff hill to his spongy relatives and friends. I would pull the caviar out of Jamie Dimon’s stomach if I had the power. I would take their kid’s out of UPenn, Colby, and Harvard. I would siphon the gas out of their Bentleys and then give the Bentleys to returning soldiers. Well, you get the picture.

[DailyBail]

In the clip (have not seen entire interview), he fails to mention that the U.S. government told him that he "needed to” do this deal (at $2 at $10 a share) or he would lose the support of the government as a bailout backstop as set up by the Central Bank.

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Zara..read what you wrote again..it makes no sense...

JPMorgan had no support from the gov't at the time...it was the first bailout...there was nothing with which to threaten jpmorgan and dimon....the Fed support hadn't yet begun...

For someone who criticizes others so quickly...get your facts straight...

[Zarathustra]

My facts are perfect. The Central Bank (Bernanke - Federal Reserve) and the U.S. Government (Paulson -Treasurer/Congress/Pres) got to that first meeting with a plan. I think it is you that doesn't remember the Paulson-Bernanke bailout timeline and events. The agreements the big banks signed, the merger agreements behind closed doors and the many phone calls. DB, don’t patronize me with such a lame response. Granted, it looked like an audible called in shotgun formation but it was very organized and thought out. They had a plan. I won’t go as far as some and say that they were part of a group of architects of the planned attack on the world’s economy. I will leave that to the conspiracy theorists.

March 10th 2008…the rumors begin…

http://www.pbs.org/wgbh/pages/frontline/meltdown/view/

Once, Blankfein even called Paulson at his home. On Saturday, March 15, 2008, six months before Paulson received his waiver on September 17:

The first call I received was from Lloyd Blankfein, my successor as Goldman Sachs CEO. It was as unnerving as it was unexpected, It was the first, and only, time Lloyd called me at home while I was at Treasury. Lloyd went over the market situation with me, providing a typically analytical and extraordinarily comprehensive overview, but I could hear the fear in his voice. His conclusion was apocalyptic.

DB, I expect more from you!

[DailyBail]

zara...you are annoying...your answer is bunk...they had nothing to threaten dimon with...he wanted to do the deal...

Your thesis is wrong and a joke...stop bugging me...

You claimed that they threatened Dimon...they had nothing...

Just think about the insane argument you are making...

Dimon originally said NO to the Bear deal...the FED panicked and offered JPMorgan a $29 billion dollar back-stop...dimon changed his mind...the deal got done...yet your thesis is that the FED had leverage over dimon...

Are you even thinking straight...the FED had to offer $29 billion to get the deal done...they had no power over dimon...

[Zarathustra]

DB...First, you are far too emotional. Please do not blame that on me. You really need to relax. I thought that was what the ski trip and time off was for. I am giving my interpretation and opinions and you are giving yours. There should be no harm no foul. You may find me annoying or whatever emotion strikes you but that is your emotion getting the best of you. I can safely say that you rarely raise my pulse with your views. You get too emotional over things out of your and my control. You got to relax.

This site is full of opinions and slanted views and speculation. Don’t get those confused with facts.

Okay, you said..."You claimed that they threatened Dimon...they had nothing..."

Yet I wrote, "This dude, Jamie Dimon, is A-Rod playing for the right team at the right time. A-Rod is often called A-Fraud by teammates and those in the know. He is just a lucky SOB (no, not short of breath)." Does that sound like I said he was threatened?

If you read some of the things you write..."the Fed panicked", you will see a lot of your own assumptions.

You said, "yet your thesis is that the FED had leverage over dimon", yet I never implied or said that he didn't gleefully accept a big chunk of change to get the deal done.

It is safe to say that you and I know ten times more than all of your other viewers combined (I won’t break down that math). My insight may upset you but it is sharp and to the point and is safely backed up with great videos and articles. I do not share you political views but I am spot on in so many ways.

I imagine that this post may get me banned/blocked but so be it, it needed to be said.

[RecoverylessRecovery]

"I imagine that this post may get me banned/blocked but so be it, it needed to be said."

Your words were so powerfully hurtful & full of rage that I'd be surprised if Steve doesn't just burn down your house to the ground in retaliation, barn and all. Or at least do a drive-by on you. Lesser words have sparked international wars. Men have dueled over such burning literary ire.

Yawn.

[Zarathustra]

I felt a bit understated, thanks RLR.

[The Beeber]

At :37, he touches his nose. In the psychology of body language, this often means that the person is lying or trying to hide something. It is very telling in this case as it comes right at the start of his response.

[Sell Short]

nice post Beeber, that language often is very good of telling if someone is lying. it always works!

[tom dee]

It is pretty clear why the Federal reserve does not want to be inspected or audited. It would expose the real federal reserve and the bankers who rape the wealth of the USA. Our founding fathers were against the central bankers and again they have been proven to be pure genius. JPMorgan just gave a 22 percent increase in his bonus. During the announcement it stated the CEO wife now holds a quarter billion dollars of JPMorgan stock. Another example of why the Federal reserve would not stand being brought into daylight. We are losing our country to the greedy bankers.

[Gmarks]

Why are Dimon and Blankfein still breathing. It is a testament to our self inflicted demise that we allow these vermin to live in our midst.

We get what we allow. The Jacobins of 1793 France understood what had to be done. Obviously we do not.