SOME BAILOUT: JP Morgan Uses Bailout Funds to Invest in More Financial Failures, Taxpayers Left Holding the Bag

Written by Jim McGrath Tuesday, 16 February 2010 13:51

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As the Reuters article below shows, we have given taxpayer money and assistance -- even at the outset of the crisis when Treasury put together the Bear Stearns deal -- to save these institutions in order to prevent a crisis, so our economy can recover and so these recipients of this largesse can speed our financial health. But au contraire, and even beyond the outrage of bonuses, the big banks have used government help to acquire additional investment failures, buying assets at vastly inflated prices, in the great tradition recently established by the mergers and acquisition craze -- deals based on vast overleveraging and inflated values, all for profit -- now with government help. And the more inflated the values, the bigger the profit.  What does big business care about what it does with your tax dollars as long as it makes a profit?  This marvelous beginning to our current bank dependency on subsidies is well illustrated by JP Morgan's recently reported move (again, below).  Can't the big banks do anything based on a sober analysis of real assets and valuations, as opposed to punchbowl practice??

 FED SEES PAPER LOSS ON BEAR PORTFOLIO: REPORT

Mon Feb 15, 9:19 pm ET

NEW YORK (Reuters) - The Federal Reserve has seen paper losses on real estate assets it acquired when it helped JPMorgan Chase & Co buy Bear Stearns, the Financial Times reported on Monday.

The paper losses at a vehicle called Maiden Lane, which holds the assets, are due in part to debt used to finance large buyouts, including those of Hilton Hotels and Extended Stay, the paper said, citing unnamed sources.

The FT said losses are concentrated in Maiden Lane's commercial real estate assets, which had been marked down to $4 billion as of September.They had a face value of $8.4 billion, with an estimated worth of $7.7 billion, when the Fed got them, it said.

Maiden Lane was formed in the second quarter of 2008, with about $28.8 billion from the New York Federal Reserve and about $1.15 billion from JPMorgan. The portfolio had an estimated value as of March 14, 2008, of about $30 billion.

JPMorgan and the Fed were not immediately available.  (Reporting by Paritosh Bansal; Editing by Richard Chang)

AGAIN, NEED WE REMIND ALL THAT:  WALL STREET + BIG BANK USA = CRIME BUT NO PUNISHMENT!

U.S. economic and fiscal meltdowns are right here - all around us - Wall Street + Big Bank USA.  Here are the pirates responsible.  Big Bank USA says NO to loans for the American people but YES to "mega-buck" bonuses for themselves!  Big Bank USA has been subsidized  by U.S. "bailout" funds, but  Big Bank USA has "bailed out" on economic recovery and the American people.  Goldman Sachs executives are getting so much gold -- man, their sacks "runneth over."  

ENOUGH ALREADY!
"LESS BAIL, MORE JAIL"

WE SAY GIVE IT BACK!