Charlie Rose Science Series
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03/17/2008
Andrew Ross Sorkin
A discussion about the purchase of Bear Stearns
Keywords:
A discussion about the purchase of Bear Stearns For $2/Share by JP Morgan Chase with Andrew Ross Sorkin of the New York Times. Following a March 14, 2008 announcement that the firm required emergency financing from the Federal Reserve Bank of New York and JPMorgan Chase in order to avoid insolvency, Bear Stearns suffered a precipitous decline in value with its market capitalization dropping by 47%. On March 16, the firm agreed to be acquired by JPMorgan Chase for $236 million (approximately $2 per share, down from Friday, March 14 close of $30 a share).
Charlie wishes to thank all those who have expressed concern for his eye injury, caused by a pot-hole in Manhattan, NYC.
Charlie wishes to thank all those who have expressed concern for his eye injury, caused by a pot-hole in Manhattan, NYC.
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Charlie Rose DVDs on Amazon.
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Audio available through Audible.com.
Transcripts
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Transcripts available through Voxant.
http://www.youtube.com/watch?v=mz3MNk24nWw I think that explains it all...
In hindsighted opinion, interesting plan if indeed it was... End result: a simple $1,000 put option investment made by an employee to hedge their personal holdings after and as a result of their Chairman�s concerning public illiquidity rebuttal comments ( http://www.cnbc.com/id/23559810 )would have yielded approximately => $60,000 in liquid assets one week later after the $2 offer was made. Even better, since most were left scratching their heads upon the simple realization that the offer was well below the $10/share general opinion, and since it�s what they do..it wouldn�t be too prudent to reinvest the $60,000 put option windfall into say a $.25/share $10 call option and make a whopping 4,000% return in transaction #2. Net result $1,000=>$60,000=>$2,400,000 in two weeks! Not a bad plan If indeed it was one! �Even better, they never would have had to sell their original shares AND the initial put option purchase since made after Greenberg�s public liquidity rebuttal would be justifiable to the SEC as a simple insurance/hedge against their personal holdings. The call option reinvestment would be justifiable in that everyone knew that the $2 offer was significantly undervalued!
It was theft, pure and simple! Anybody who claims this as a rescue has no idea what they are talking about! The Fed is not a government agency it is a private central bank which one of the founders were none other than JP Morgan himself. This is a bail out and it was at the expense of the shareholders and the tax payers.
During such an important period, governorgate last week, your fall, and bear sterns this week....with all this you are not on the air for 3 weeks in San Diego....what can we do to get you back on the air....quickly!
Charlie we have watched you for years, and this is pretty shocking (Not to mention way out of character for your public persona..Which might explain something..) But I am sorry Charlie.. No one seems to be buying the story about your taking a fall to save a computer..Even if it may be true.. My Husband said this all sounds like you are trying to (no pun, seriously :^) ) save face.. lol ok *composes self* Truly though, we hope you're feeling better :*) p.s. Don't worry Chuck, nobody's perfect. Only One perfect One. Look what they did to Him..
Charlie we have watched you for years, and this is pretty shocking (Not to mention way out of character for your public persona..Which might explain something..) But I am sorry Charlie.. No one seems to be buying the story about your taking a fall to save a computer..Even if it may be true.. My Husband said this all sounds like you are trying to (no pun, seriously :^) ) save face.. lol ok *composes self* Truly though, we hope you're feeling better :*)
Thank you Charlie Rose for being the gentleman that you are and for the roundtable of thoughtful discussion you offer us week after week. You are a rare breed in this age of insanity and sensationalism and watching your show helps to calm me down and reminds me that there are still so many honest intelligent minds who care about the future of our country and our world. I especially enjoy the programs you've had on the subject of longevity and genetics with leading edge thinkers like the delightful Sir Paul Nurse. Sorry about your eye. Poor you! (Hate to think what the other guy looks like..) All the best to you Charlie Rose, and thanks again for the high standard you keep. Your well informed questions spark so much good talking. Martha Magee NY NY
Sorry about your accident, Charlie, hope your eye heals soon. I so much enjoy your show -- please keep up the interesting discussions.
Yesterday's program was one of the best and my reason for waiting to watch Charlie Rose. Both topis: Economy and Obama's quandary were discussed thoroughly and comprehensively, it left one with a (intellectually)satisfying feeling.I wanted to listen to the guests' analysis and insight.Congratulations and thank you. 5 stars from me.
Charlie, wishing you a speedy recovery.
Fuming here in Oregon. How is it these morons of Wall Street get away with saying they didn't know it wouldn't work, or didn't know how it would work. Then why were they allowed to do it?! This is about the 19th generation of synthetic securities collapse and I could string a souvenier necklace with all the default crises they have generated. Orange County, Asian Currency, Enron, blah, blah, blah. And once again, the taxpayer, nay, the nation - worthless dollar -pays for the bursting of the premeditated bubble. I don't want the $30 bil debt, I want some upside. Give the taxpayer some of the assets in return for the risk. Bundle the assets and liabilities of Bear Stearns into a pool of securities, that way JP Morgan can share the upside and the downside with us. Shouldn't be a problem for them, afterall, the risk will be well diversified. Right?!!
Just a note to say "get better" ...the eye injury looks painfull!- HUGE fan-Samy
Oni says he decked Charlie, I say he bumped into a grizzly bear and lost the fight. this program was another good one, but I am angry and would like to deck Charlie for changing the interview witb David McCullough. Mr.McCullough is my favorite historian and author. I am interested in the ecomony and election 2008, would rather see the interview with Mr. McCullough. Don't worry Charlie, I am not 6 foot 3 1/2.
i hope the show has sorkin on more often he is a great guest who can really keep your attention. you could tell he himself was incredulous as he reported the story. as i posted earlier,one of the possible reasons for charlie's injury was that he was attacked when he accidently wandered into obama's church as wright was giving his flock his standard antiguated sermon inciting them to "get whitety!"
Charlie, Great shows as always --- you are the premier "Knowledge expert" and "zeitgeist raconteur" in the USA --- hope your eye heals soon; I'd think Steve Jobs and Apple should at least give you an endorsement/product savior spokesperson reward after your valiant attempt to save the MacAir -- Should be a great NCAA Hoops Tourney -- and I know you'll be following --- look fowrward to more fantastic shows! Steve
What a great interview last night with Andrew Ross Sorkin. He explained explained much of what the cable news chatterheads fail to touch. In Charlie's second interview, also on the Bear Stearns bailout, Lawrence Summers seemed much like a damage control agent compared to Sorkinâ??s presentation. That said, I'll admit that I know little about finance, yet more today than I did yesterday.
OUCH just looking at Charlie made me wince. As to the whole Bear Stearns mess and then listening to GWB do his 'dont worry be happy' nonsense, made we think of how naive many Americans are. And to think that the financial outfits that are in such trouble also have taken some trusting Americans who bought homes and got sucked into bad deals, and yet GWB wants to bail the big boys out but to hell with the average citizen. Wonder if NOW more Americans will give some hard thoughts to the reality that everything GWB has done in his life has been a failure, or in the case of the Texas Rangers happened because his Daddys friends helped GWB out. So not only has GWB screwed up other parts of the world but our world here at home. Makes me sick.
what happened to charlie rose's eye?
Charlie, If you need to apply ointment to your wound, you can use a soft paintbrush or makeup brush to do that. Make sure you rinse it out with hot water each time. It's softer than using your finger and will help in the healing. And get ready for the green/yellow stage - it's lovely !
The discussion about the purchase of Bear Stearns reinforced my conviction that the cover-up is already underway regarding the biggest scandal in recent memory. The scam as designed by the smartest financial wizards for the sleaziest financial mavens was actually fairly straightfoward in concept. Find credulous folks with no money to take on loan obligations and then securitize the loans for use as collatoral. Slice and dice them and mix them in with higher quality debt so that their origion cannot be traced, and then market them in a smokescreen of psuedo-scientific babble and glowing rhetoric. The semi-phony securities can then be used to obtain low interest loans that hugely leverage the original tiny investment. In an economic uptrend vast amounts of money will go into the coffers of the principals, and when the situation turns sour they will be bailed out by their friends. These practices go beyond the merely feckless and reckless and appear really to be a case of outright massive fraud. Its no wonder that the bankers are reluctant to lend to each other now that a downtrend is at hand and the House of Cards is teetering. This the true legacy of RR's greed is good philosophy. We can only hope that after the dust settles, that a perp parade of robber barons will begin.
Warren Buffett used a term the other day that applies to the US dollar â?? the US currency is turning into confetti. You can read why on the following thread: The US dollar and the biggest default in history. http://www.elitetrader.com/vb/showthread.php?s=&threadid=121313 Why should Ben Bernanke worry about government bailouts? Already over 70 percent of the US dollars ever created in the US are flying around the world outside of the US government circle of influence anyway, and they can print tons and tons of the stuff at any time and very soon the US dollar will be sold by the kilo on international markets. .
Charlie, I too love Macintosh. Will pray for your speedy healing. Please consider Homeopathic Arnica Montana (oral or topical). It really works! Take care.
Ouch-o-Rama! Get well soon, Charlie!
So sorry to see you are hurt and very thankful its not worse. (Frozen peas work wonders). Wishing you a quick recovery - and remember: a black eye is very sexy.
Rose tripped on a 59th street pothole and to protect his newly purchased MacBook Air, he sacrificed his face. According to his producers, "The Macbook Air is fine, he showed us the blood stains on it this morning." http://www.engadget.com/2008/03/18/charlie-rose-sacrifices-face-for-macbook-air/
Oops, I now see it was cause by a "pot-hole". I always guessed Charlie liked the weed ! (kidding)
Last year, before I got sober, I fell and got a huge black eye like Charlie has. Let me tell you, it throbs & hurts! How about Charlie or PBS putting a short note on the home page, telling us what happened? It's obvious we all care about him & wish him well !
We ALL would like to know if Charlie is ok? He has big shiner. What happened?
I would very much like to see a discussion on your program about the role that the media is playing in the economic woes of our country. It seems as if the media is sensationalizing the economic news in a way that is making everyone edgy and fearful which only feeds economic collapse. There is so much political discontentment that it feels as if the media is determined to drive all of our country into the ditch to create a point that doesnâ??t exist. It would also be good to see a discussion about how we got to this place where people who were not credit worthy were given loans; why all these bad loans were bundled and sold to foreign investors and what deregulation has had to do with this.
Hi Charlie ! As longtyme viewers - and admirers - what happened to you left eye ? ( a classic "shiner" and bandaid) Larry Summers = a yawner - at best ... the guy just can't communicate - ever ! Bless you for your superb tributes to a longtyme "hero" of mine - Bill Buckley Jr. ! And... may our economy - and that of the rest of the world - rebound !
When my company had to be closed due to IRS uncertainty whether our Temp Staffing Respiratory Care Co's subcontractors would be suddenly retroactively declared employees meaning the company would be liable for back FICA and SSI contribution. I called my old boss at Goldman and Sachs Richard Menschel asking his advice on my going into brokerage business. He said the business had changed beyond recognition from the time when I had worked for him as a direct result of the deregulation of the brokerage industry. That was in '86. I was a broker in a discount house when the '87 crash hit. Guess what I was offered next? The same house was opening a mortgage division based on the deregulation of banking going into secondary mortgage market. When taxpayers bailed out Chrysler, then the Savings and Loans and every other time it's happened post WWII the winners were always the same guys schilling the free markets self correct orthodoxy. When they don't like the outcome they get the Fed or the government to intervene. The execs who drove the concern into the ground get golden parachutes and medals of freedom not the jail time they so richly deserve and the average working stiff gets the shaft in destruction of trust in public institutions and lowered services while being pick pocketed by taxes. When the SEC was put into place by FDR it was for a very good reason. We had 20 year boom and bust cycles largely due to markets being totally manipulated by the ruling elite for their own benefit that reigned supreme as the way things were from the Civil War to 1929 and Smoot Hawley Act of 1930 had nothing to do with it. Among those regulations were limits on margin percentages, investment products had to be based on real businesses not some fictional i.e.,synthetic, a cute word for phony, investments and a whole series of checks and balances that have been undermined if not outright abolished by neo-liberal, neo-conservative, and reactionary policies advocated by Milton Friedmann and others. Somehow one never sees them filing in Bankruptcy Court though their moral and intellectual assets are long moribund.
top 10 real reasons for charlie's injury #10 wife found e-mail from emperor's club #9 interview with french president went poorly #8 had spirited meeting with his broker who had him heavily leveraged into bear stern #7 appearance on THE VIEW #6 had asked mrs.spitzer what the old man got for $4000 #5 had just been mugged for having no euros just worthless dollars #4 his smart car met a dumb suv #3 had been doing his famous fidel castr-falls off the stage routine #2 had been out drinking on st.patty's day with regis AND THE NUMBER ONE REASON FOR THE INJURY IS: he accidently wandered into wright sermon about "getting whitey!
On the bailout thing, does it seem to anyone else that, as usual, things are being done backwards and thus only helping half the problem? Rather than bailing out the lenders on the back end, wouldn't the same monetary resources have had a more fulsome effect had they been used to re-finance the mortgages of the owner occupied homes in danger of being repossessed? Seems like the homeowners are saved and there would have been no continuing collateral problem for all the companies in trouble now?
been watching with interest, your interviews concerning the worsening financial crisis and the attempts to lessen its effect on our populas--i hate to see it happen but it looks like the only solution is going to be more and more government control of prices, commodities(gasoline), foodstuffs, and precious metals until a leveling out is achieved.
Glad to hear you are ok, but seriously what happened to your eye? Did you fall? We are all only asking because we are concerned. We hope no one hurt you. Thanks
Charlie, I just saw you on TV, heading for Las Vegas to visit John who is a big fan of yours. Need to know exactly what happened to your eye.
Charlie, your eye, it looks painful. Thanks for being there on this important day in our country's financial fiasco. I applaud your dedication.
Yes, I'm worried about Charlie's eye too! Wish he would say something. If he fell into a pothole in Manhattan, he's lucky it didn't happen in San Antonio -- lest, he'd still be falling. Take care, Charlie! Hope you heal quickly! Kat
What happened to Charlie's eye? No mention during the opening of the March 17th show, why he's made-up like he's auditioning for a roll in the next Rocky Balboa film or the aftermath of some Irish pub crawling on St. Patrick's Day.
I am glad you are ok Charlie, but seriously what happened to your eye? How did it happen? A pothole? Did you fall?
Charlie, you MUST say something about your eye! We are all thinking that either someone punched you, or, you fell down the stairs -- what happened?
What kind of pot-hole hit Charlie?
I know we want to talk about the issues, but I'm tired of being broke, not saving, and most recently hearing about the magic of $600.00 that will be returned to me by people who didn't know how to spend that money when I gave it them the first time. Let's talk about something more important. What happened to Charlie?
Charlie, we love you as much as we love your show and we would like to know what happened to your eye? Glad to know that you seemed to be OK.
Charlie, we love you as much as we love your show and we would like to know what happened to your eye? Glad to know that you seemed to be OK.
Why is risk/reward so asymmetric in financial industry ? Hedge Funds, and all counter parties to Bear Sterns were bailed out at tax payers expense of $30 billion. When its time for rewards how much do tax payers get ? If tax payers always need to bail these folks out, why shouldn't they be heavily regulated ?
Why is risk/reward so asymmetric in financial industry ? Hedge Funds, and all counter parties to Bear Sterns were bailed out at tax payers expense of $30 billion. When its time for rewards how much do tax payers get ? If tax payers always need to bail these folks out, why shouldn't they be heavily regulated ?
Discussion concluded. W says domestically we're OK (just a 'patch' we're in); internationally Cheney has imparted the reassuring news that Iraq is a success and well worth the effort. WHEW! I'm soooo relieved, I could just . . . . well - poop!
what happened to charlie's eye?
David Fredericks: Charlie Rose Monday, March 17, 11:30pm CHANNEL 10 (KLVX) View more broadcast times The Washington Post's Robin Wright ("Dreams and Shadows: The Future of the Middle East"); chef Thomas Keller.
Before-the-fact. Anticipating the 'party' line. Namely a bailout is justified. Moral hazards ignored a la Savings & Loan bailout. Which assures a certain repetition in the future. They'll let innumerable destroyed mortgagees be evicted and dispossessed, but they'll lend, print and distribute OUR play money to the financial wise-guys to salvage their venal egregious greed for another day. Banana republic inflation insured.--$$$$$--What happened to the responsible income-to-loan (P+I+TAXES+INS) requirement of 4 or 5 to 1????? --$$$$$-- Victim of greed for loan FEES and the sale of the known worthless sub-primes to the secondary market. Citigroup et al are all scumbag institutions that deserve their market thrashing. Poetic justice. Blood sucking predators with their ARM and CC usury. Puppys and old women will rejoice if they are allowed to bellyup. They decry regulation. So give them what they want - no intervention.
I'm trying to learn what time the Charlie Rose show can now be viewed in Las Vegas.