Commentary - 03/14/2008

Bear Stearns - Why? [Updated 3/16/08]

"From now on, depressions will be scientifically created," is a quote from Congressman Charles A. Lindbergh Sr. and this was the focus of my last commentary here. There was also an explanation for why this should happen.

The recurrence of historical events is shocking enough. Why do they think they can get away with it? Maybe it's because they can! Of course, there is no way to prove it's going down like this, but this seems like the same M.O. that they have used before. And it worked!

First, let's revisit the story printed in the New York Times about Knickerbocker Trust during the first day of the Panic of 1907. Seems almost like the statements being made today about Bear Stearns.

On October 22, 1907, the New York Times ran a story under the heading "Knickerbocker Will Be Aided." Within that story were these paragraphs:

"The action of the Bank of Commerce, according to Mr. Higgins, came as a complete surprise, and he admitted frankly that the task he had to meet was a heavy one."
. . .
"It was rather generally commented upon among the Clearing House banks which received the notification from the Bank of Commerce of its breaking off of relations with the Knickerbocker that this notice had been given in a way quite out of the ordinary."
The next day, completely reversing the previous day's news, the New York Times ran this story:

Okay, so much for that. Those in the know got their $8 Million out of the collapsing bank, and then they let the bank fail.

Now let's jump forward about 100 years. Today's Bloomberg headline was Bear Stearns Gets Emergency Funds From JPMorgan, Fed.

March 14 (Bloomberg) -- Bear Stearns Cos. shares plummeted a record 53 percent after the New York Federal Reserve and JPMorgan Chase & Co. stepped in to rescue the fifth-largest U.S. securities firm with emergency funding.

The regulator stepped in to prevent the collapse of the second-biggest underwriter of U.S. mortgage bonds and forestall a potential market panic as losses by banks and brokers reached $195 billion and stocks plunged for a third day this week. JPMorgan, which has suffered fewer losses than rivals during the credit crisis, may end up owning all or part of Bear Stearns, analysts speculated.

The links in the quote above will take you the tables below to show the Major Holders of both J.P. Morgan Chase and Bear Stearns. You have to remember that the Federal Reserve has always maintained that it is owned by its member banks. Now you can see who owns the member banks, and how these firms are inter-connected. Here's a list of the Largest Investment Banks, and a list of the Largest Money Center Banks, with links showing not only their inter-connections, but also their Major Holders. Be sure to drill down to also see Major Holders of the Major Holders. The same names keep popping up, do they not?!

But inducing the Panic of 1907 was not the first time. There is an explanation here for previous actions taken way back in 1873.

The crash of 1873 was brought on by the failure of the House of Jay Cooke & Co. Jay Cooke was a London banker, and the agent of the Money Kings for building the Northern Pacific Railroad. The failure was arranged in such a manner that it did not involve the London house of Jay Cooke & Co. at all. But the failure of the American house accomplished its purpose. It started a crash whose influence lasted five years, prostrating all our industries, and sweeping the country with a deluge of bankruptcy; enabling the Money Kings to hold carnival in the purchase of our produce at low prices, and in buying up property cheap at bankrupt sales.
. . .
They stand convicted before the eyes of the world, of an atrocious crime against the country, and against humanity. They did not even have the grace to let the London house of Jay Cooke share in the failure. They sent him to America as a dynamite bomb, to explode and destroy the prosperity of the United States. And they sent him carefully disconnected from his London house, so that the ruin he wrought would not effect the London house with which he was connected. Jay Cooke may have been an innocent victim of their purposes. They do not inform their agents of their designs.
. . .
It is a dreadful thought that the Money Kings have our industries so completely in their power that they can cause another panic such as that of 1873, whenever they choose. They could start one tomorrow far worse than that, as their control of our industries is far more complete now than then. Our prosperity is entirely at their mercy.
So there you have it, straight from an old book published in 1889. Now happening before your eyes is at least the third time such a M.O. has been used. Are we not supposed to learn from history? Is this how colleges and universities that teach economics, business and law, by LYING BY OMISSION? If some non-lettered guy like me can back-track this information in a few years, what the hell are PhD and MBA students doing? Throwing away their valuable time and money? Or are they being programmed to IGNORE these valuable lessons of history?

Is that why gold and silver are ignored as if they were barbaric relics? Why does a group like GATA have to exist to educate the few willing to learn? Most of which is discussed should have been common knowledge ingrained in ALL students before they left high school, if they hadn't been LIED TO BY OMISSION!

I guess the powers that be figure the public should be damned.

So this is why: Sometimes The Dragon Wins

Updated 3/16/08: JPMorgan Buys Bear Stearns at Huge Discount
Bear Stearns, pushed to the brink of bankruptcy by what amounted to a run on the bank, agreed late Sunday to sell itself to JPMorgan Chase for a mere $2 a share, narrowly averting a collapse that threatened to cascade through the financial system.

The price represents a startling 93 percent discount to Bear Stearns’ closing stock price on Friday on the New York Stock Exchange.

Bankers and policy makers raced to complete the deal before financial markets in Asia opened on Monday, as fears grew that the financial panic could spread if Bear Stearns failed to find a buyer.

Symbol Name Of Corporation

JPMorgan Chase & Co (As of 31-Dec-2007) (As of 30-Jun-2007)
Top 10 Institutional HoldersShares2007Value2006
AXA (Paris, France)162,403,2304.83%$7,088,900,989-.--%
Barclays Global Investors UK Holdings Ltd150,034,4754.47%$6,549,004,833-.--%
State Street Corporation123,254,2063.67%$5,380,046,091-.--%
Vanguard Group, Inc. (The)100,641,6663.00%$4,393,008,720-.--%
FMR LLC (Fidelity)89,333,4812.66%$3,899,406,445-.--%
Capital Research And Management Company74,443,9012.22%$3,411,019,543-.--%
Davis Selected Advisers, LP73,675,3802.19%$3,215,930,337-.--%
Capital Research Global Investors66,839,9011.99%$2,917,561,678-.--%
Bank of New York Mellon Corporation57,802,6121.72%$2,523,084,013-.--%
Goldman Sachs Group Inc46,848,3411.39%$2,044,930,084-.--%
% of Shares Held by All Insider and 5% Owners:1%-.--%
Top 10 [0.7%] of 1317 Institutional Holders Control28.14%-.--%
Percentage of Barclays and "Associates" Control11.25%-.--%
NOTE: Vanguard manages four funds that control 2.87%.
Capital Research manages a fund that controls 1.99%.
Davis Selected Advisers manages a fund that controls 0.99%.
Washington Mutual manages a fund that controls 0.91%.
Barclays manages a fund that controls 0.59%.
Legg-Mason manages a fund that controls 0.53%.
Therefore, the TOP 10 Major Holders control 36.02%, and
Barclays/Associates controls 13.28% of JP Morgan Chase.
Capital Group controls 6.20%.

Symbol Name Of Corporation

Bear Stearns Companies Inc. (As of 30-Jun-2007) (As of 30-Jun-2006)
Top 10 Institutional HoldersShares2007Value2006
Putnam Investment Management, LLC7,031,1876.05%$984,366,1804.42%
Private Capital Management, Inc.6,962,6426.00%$974,769,8806.54%
State Street Corporation3,832,4003.30%$536,536,0003.44%
Barclays Global Investors UK Holdings Ltd3,652,1973.15%$511,307,5802.67%
Barrow, Hanley Mewhinney & Strauss, Inc.3,597,4503.10%$503,643,000-.--%
Vanguard Group, Inc. (The)3,313,6982.85%$463,917,7202.41%
Janus Capital Management, LLC3,113,6562.68%$435,911,840-.--%
JP Morgan Chase & Company2,606,6242.24%$364,927,360-.--%
Oppenheimer Funds, Inc.2,445,9202.11%$342,428,800-.--%
Nomura Holdings Inc.2,414,2012.08%$337,988,140-.--%
% of Shares Held by All Insider and 5% Owners:5%7%
Top 10 [2.1%] of 470 Institutional Holders Control33.56%27.91%
Percentage of Barclays and "Associates" Control23.42%23.68%

© 2008 by Edward Ulysses Cate
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