Wikinvest Wire

Jim Rogers on the Bear Stearns bailout

Monday, March 17, 2008

Bloomberg tracked down Jim Rogers somewhere in Asia and he was none too pleased with the way the U.S. government has been throwing its money around.

Click to play in a new window

On why Bear Stearns was bailed out:
You know the reason they did it this way was because, if Bear Stearns had to declare bankruptcy, you'd realize that Bear Stearns paid out billions of dollars in bonuses in January - six weeks ago. If he let them go into bankruptcy, they all would have had to send back their bonuses.

This is what they're doing, they're doing it so they don't have to give back their bonuses. That's why they didn't put them into bankruptcy. Jamie Dimon has gotten a great deal because the Federal Reserve is paying for it. The Federal Reserve is using taxpayer money to buy a bunch of Bear Stearns traders' Mazeratis.
On letting banks fail:
Investment banks have been going bankrupt since the beginning of time. What are you talking about? Let somebody go bankrupt - it's not the end of the world.

You remember what happened in the 70s when they tried this tactic - when Arther Burns kept printing money. Finally, interest rates had to go to over 20 percent and they had to bring in Paul Volcker who had to take draconian measures and put the country into a serious recession. How much more money do you think the Federal Reserve has?
On risks to the banking system:
In 1966, the entire Japanese financial community went bankrupt. Every broker in Japan was in bankruptcy. Japan came out of that and became one of the great powerhouses of the world.

In 1907, everbody on Wall Street was bankrupt. Everybody was bankrupt in 1907. America recovered from that and had a very nice future. Are you telling me that we're never going to have bankruptcies in the financial community again?
On Alan Greenspan's role in this mess:
The first two central banks in America failed. Between Greenspan and Bernanke - I've written this, it's in my book, long before this happened - they're setting up the failure of the central bank. The demise of the Federal Reserve.

The first two failed, this one is going to fail too - because of Greenspan and Bernanke. Greenspan laid the perfect foundation for Bernanke.
Interestingly, four or five Bloomberg articles used quotes from this interview but none of the material above. They just used excerpts from the first part of the clip on the U.S. dollar and commodities.

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26 comments:

fresh said...

Why would the bankers and brokers have to return their bonuses? How would you force them to return their bonuses? take each one to court?

If anyone is getting a sweetheart deal its JP Morgan. They buy BSC for 1/4 billion and the feds guarantee against any downside risk.

All in all I think BSC got made a real good example of. Investors and senior execs with large parts of their wealth tied up in BSC saw all that money evaporate.

If last week the fed had opened up the discount window to the treasury dealers and took illiquid securities as collateral well then maybe Jim rogers point may be valid.

Anonymous said...

occurring less than 90 days before a bankruptcy filing would likely constitute a "preference" that would be voidable, because the company obviously didn't have the money to pay those bonuses. I am not a bankruptcy expert, but generally payments made out less than 3 months prior to a filing can be rescinded on the basis that whoever got money so close to the bankruptcy should have to get in line with all the other creditors and divvy up the scaps, not get a fully-compensated advantage.

People give Jim Rogers grief on this page sometimes, but his calls on the yen, franc, renminbi, and short investment banks, long agriculture all look pretty good to me. If he only said how much to allocate...

Anonymous said...

Rogers is always right on the money. He has no loyalties to the Big Banks or Big Government or lobby groups. He is beholden to no one and that is made clear by how accurate he has been. I have followed Rogers advice and have benefitted from it. He is absolutely right here in saying that it is pathetic what Bernanke has done here to bail out BSC. Should never have been done. Bernanke is a shill for the Big Banks.

Anonymous said...

The FED bailed out BSC to prevent a meltdown in the Credit Default Swap market. If BSC goes BK, then the event will pull back the certain on another financial market farce: Credit Default Swaps.

There are funds out there guaranteeing BSC debt without the resources to make good on that agreement.

Anonymous said...

"The FED bailed out BSC to prevent a meltdown in the Credit Default Swap market."

So what is the end game here?

Lets say that the Fed succeeds and by creating tons of liquidity and money we get through this period of time relatively unscathed.

The message that is being sent out by their actions to all the folks who have been responsible with their finances is:
1) Only a moron would save dollars
2) Take all the risk you want since the government will bail you out, just make sure that your risks are big enough to warrant a government bail out.

So while we made scrape through this crisis, in the next crisis (which will come) there will not be any responsibile people left to pay for the deeds of the irresponsible.

What happens then?

Anonymous said...

I was listening to his phone call to Bloomberg and his tone does not come through in the transcript. He was pissed off.

Matthew said...

Any chance that he is upset because he had bets that would payout on a default that won't now?

Take anything any investor says about anything with a huge grain of salt.

Anonymous said...

When will Americans realize that this Depression in the making is a con job a NEO con job to be exact.
Will they only realize it when they are all in the streets huddled in weary masses.
You are all being played as suckers that you are.
You will all lose your constitution and bill of rights Canadian laws will rule all of North America.
And you all will be in the North American Union.
SO stop your silly grinning and saluting the flag while bending over backwards to take it up the rear end.
stand up for once in your lives and act like your forefathers did.
What they rebelled for ,fought and died to give you. you have givern up and live under worse tyranny thna they did.Worse yet you grovel in it like pigs in a sty.
your number has been punched ,your economy on the verge of collapse ,your resources depleted,your sense of morality and spiritualty zero.
you have become the enemy of your founding fathers.even the 2nd world war veterans would hate all of you.
the few that try to sound the alarm
are rediculed .the masses now retarded from the 1200 nuclear bombs.
Canada doesn't want a Union with you all,you are now all barbarians,ignorant and dumbed down into stupidity and numbness
Why would Canada want any Union with America.It is a waste land of ineptedness
Where once America was a great country ,Americans collectively have let it become a POS.
We look south with disgust
America depleted of re3sources on the verge of collapse,it's people ignorant and lost.
WE have nothing anymore in common with America ,it has become the plague on humanity.The world must now see to it that America is crought down and crushed like we did to the last Nazi regime America's predocessor.

Anonymous said...

DON'T ASK: WHY SHOULD THEY RETURN THEIR BONUSES, ASK WHY SHOULD THEY GET A BONUS AT THE FIRST PLACE, THIS FINANCIAL SET BACK DID NOT START LAST NIGHT,BSC KNEW WHAT WAS GOING ON.
THIS IS AGAIN CORPORATE WELFARE, SOCIALISM FOR THE RICH,THE VERY SAME WHO ARE COMPLAINING OF THE COST OF SOCIAL PROGRAM FOR THE POORS, GIVE THEMSELVES A SOCIAL PROGRAM, PAID WITH FIAT MONEY FROM THE FEDERAL RESERVE CONTRIBUTING TO THE DEVALUATION OF OUR VERY WEAK DOLLAR.
SPECULATION AND ARBITRAGE HAVE BECOME THE FOCUS OF OUR CORRUPTED US FINANCIAL SYSTEM RATHER THAN SUPPLYING CREDIT TO THE REAL ECONOMY.
OUR FINANCIAL SYTEM ITSELF (FEDERAL RESERVE WITH FRACTIONAL RESERVE BANKING) IS THE CAUSE OF THE PROBLEM AND IS NOT WORTH TO BE SAVED.
WHO IS BAILING OUT THE PEOPLE WHO ARE LOOSING THEIR HOME ?

Anonymous said...

I think Bernanke's thesis in college was on "The Great Depression"...a bit telling maybe?...Mr Greenspan could predict the storm before the clouds gathered....uumm ...GP

pft said...

The top executives did not get any bonuses this year, they gave them up.

http://dailybriefing.blogs.fortune.cnn.com/2007/12/19/bear-stearns-bonus-breakdown/?section=money_topstories

The current financial crisis in a financial 9/11, given to you by the same people who gave you the physical 9/11. The twin towers collapse in the heart of our financial center symbolized what was to come. Prophetic. Good bye dollar.

Anonymous said...

ABOLISH the Federal Reserve!

MIchael said...

Let's cut to the chase. This is an excuse to hand billions of dollars to Jewish thieves, once again.

Anonymous said...

pft, note the date on that article..
i did some searching upon reading this as well.
$2.06 Billion in bonuses paid out. according to 2/25/08 article
http://www.iddmagazine.com/issues/2008_8/138510-1.html?partner=fierce_finance

perhaps they knew belly up was in the works and decided to go all in, integrity and all.

Anonymous said...

Zionist thieves.

It won't be long until gold and savings are confiscated to cover the US debt. But you'll still owe on your house and credit cards. Big coincidence that the bankruptcy laws were changed a few years ago? They didn't see this coming? Yeah right.

MIchael said...

According to "The Final War for Jerusalem," (toward the bottom of the post. The Jewish takeover of America will go something like this:

http://www.noahide.com/finalwar.htm



"2) In the second stage, the growing Noachide movement will seize political power—using only peaceful, lawful means—in the capitals of the Western nations. This, of course, will not take place until the Noachide society has grown to some threshold size. We do not know how large this needs to be nor which nations will join the revolution first, although the United States, as a fairly religious, conservative nation, certainly tops the list of prospects.

Upon seizing the reins of government, the new Noachide leaders will move quickly to implement a full agenda of reform. All economic and technological aid to the Communist Bloc, including the PLO, will be terminated immediately. Full support will be given to Israeli forces to reinvade PLO-controlled areas, with military assistance offered where necessary. Jewish courts (the batei dini of the rabbis) will be granted full legal sovereignty over Jewish citizens within each country, who will no longer be subject to the authority of gentile courts. The pre-existing Noachide judges and courts will replace the existing court system of each country, and the legal code will be drastically rewritten to conform to halacha; in the United States, the emphasis will be on restoring the authority of the Constitution and abolishing all unconstitutional government programs and agencies. The national debt will be foreclosed, probably by paying off creditors with government land holdings, thus averting economic disaster. And law and order will be fully restored through the establishment of internal security measures, again in accordance with Torah law.

Almost as soon as aid to the Communist Bloc stops, the international Communist revolution will plunge headlong into crisis. The captive peoples, seeing their liberation at hand, will genuinely rise up to throw their brutal dictators out of power, and the armies of Gog and Magog—ranging from the Soviet Communists to the PLO—will self-destruct before the eyes of the entire world.

Naturally, Amalek's agents will scream hysterically to intimidate Jews from carrying out the above campaign, hoping to delay this victory. They have no power, however, to prevent our successful action; they can only try to create doubts and hesitation.

As the world plunges headlong toward the imminent revelation of Moshiach while the last walls of the exile disintegrate, the number of confused gentiles ready to change is rising exponentially. If the Jewish people immediately begin preparing adequate structures for the Noachide movement, this tide will be channeled directly into a glorious revelation of Truth. But if we allow ourselves to be caught unprepared, this same overwhelming force for social change can, G-d forbid, be diverted to empower Amalek's final assault on holiness. It is not a matter of whether gentile society will explode in the face of the growing crisis; this event is an inevitable, and fast-approaching, reality. We do not want to miss this incredible opportunity to provide light in the final moments of darkness.

The world has reached its ultimate point of decision, and the power to succeed belongs entirely to the Jewish people. We can wait until Moshiach comes on his own, following a world war, or we can bring him through our own actions, as the Lubavitcher Rebbe has stated is our mission. The choice is ours.

There is not a minute to waste. Jews everywhere, unite!

(you're final putzing is about to arrive...)

Anonymous said...

Rogers is the stupidest person ever to show up on Bloomberg television. I can't wait for this commodity run to end (yes, I know it will take years), just so he will disappear again.

RB said...

The Honorable Ron Paul is ignorant of an ongoing conspiracy to topple, financially, the West, in order to equalize the world's economies; for building one-world government under GLOBAL ECONOMIC SOCIALISM. // The conspiracy began in the 1940s with the GATT formulations. // Ask why Greenspan had violated his chairmanship duties by advising prospective home-buyers to take out an ARM. // Ask why Greenspan had sent out fed regulators to warn banks that they'd be charged with RACISM if they didn't loosen home-loans for minority, HIGH RISK home-buyers. // Ask why Greenspan recently, TRAITOROUSLY, had advised OPEC oil producers to de-link from the U.S. dollar. // Greenspan - the FEDERAL RESERVE - has embarked on a purposeful set of monetary policies designed to destroy the West's financial underpinnings. // Read about the WHO, the HOW, and the WHY of it in my below article (first one): Planned Destruction of America: http://planneddestructionofamerica.blogspot.com/ // Corporate America: What Went Wrong?: http://corporateamericawhatwentwrong.blogspot.com/

Anonymous said...

The Fed isn't the solution; it's the problem. To bail out Fed cronies is like putting kiddie bandaids on a cancer: it won't work. The Fed is a racket run by Rothschild cronies--it steals directly from the spigot. Now it wants to play God because it has erected a marble lemonade stand next to that spigot. The solution? Phase out the fed, then move toward a global currency based on sustainable resources, not the invented numbers of an ecology-killing financial mafia.

Anonymous said...

the plan is working---all to introduce the "AMERO" the falling dollar, the out of control financial/stock/realestate/energy etc etc is the perfect reason to abolish the dollar, adopt the North American Union. Bush has succeded with his open borders policy and the secret aggreements between Canada and Mexico. Patriots UNITE! they MUST NOT WIN!

ip said...

Tim,

Help! This great thread is being overrun by the spiritual children of Goebbels (the North American union comment above looks almost sane and good-natured in comparison).

I fear that once they decide your blog is a nice neo-Nazi hangout, that will stomp out the normal intelligent discussion here for good.

MIchael said...

The Spiritual Children of Satan, as described by Christ, have taken over the Federal Reserve, and we see what they're doing to America with their power.

These same 'Spiritual Children of Satan" have taken over America's Foreign policy and given us the "Century of war and total American World Domination" by the "Neo cons".Now our foreign policy is made by people eligible for citizenship in Israel. American world control now means "Israeli" world control, or Jewish World Control to be more direct.

These same Spiritual Children have taken over the media and give us filth...pimpery, and every degrading thing on prime time television.

Compared to these people, Goebbels was a straightforward man.

Have you ever wondered how things might have turned out different if Samuel Untermeyer hadn't announced a world wide boycott of German products, in the name of the Jewish people in 1933?

www.wintersonnenwende.com/scriptorium/english/archives/articles/jdecwar.html

Tim said...

ip:
I never realized what a powerful force my transcriptions were...

Chimbles said...

I too question the validity of the bonus return claim... simply said it's a stupid statement to make. However, THATS EXACTLY what majority of people want to hear. "The government is bailing out fat cats, while no one is bailing us out, the common folk" also the same people are claiming that Satan took over the Fed... sad to say that todays reality show Americans are not capable of a complex thought.

Michael said...

JP Morgan volunteer to buy bear sterns. Many people don't know JP Morgan/Chase has $ 90 trillion worth of derivatives in its books. The Pandora's Box is 500 trillion worth of derivatives in US banks, brokerages and hedge funds. When interest rates goes up and they will because inflation is threatening the economy, many of those institutions will go under. The stupid and corrupted federal reserve will try to bail out everyone at the expense of taxpayers. Bernanke along with Greenspan, Paulson will be despise for pushing this country to bankruptcy with their flaw policies. Our bubble economy will pop and the aftermath will be lost of trillions of dollars. We don't need these clowns with ivy league education. We just need the gold standard. The wise and prudent will educate themselves on these matters and plan accordingly to escape the collapse of the US financial system and currency. Time is short. Everyone is literally vacationing on the titanic. It looks grand and luxurious. We all know how it ends.

Anonymous said...

WHY DID ALAN GREENSPAN USE THE ALIAS "ABE GREENBERG" WHEN HE USED TO CONTACT BEAR STEARNS WHEN HE WAS CHAIRMAN OF THE FED?

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