NYT reporter: Okay so I wrote this story about how all of these college seniors who got offers from Bear are being told "no dice," cause, you know.
NYT photographer: Right, yes, I'm aware. I rode the elevator with Andrew Ross Sorkin the other day, he clued me in to the sitch.
Reporter: Okay, so the thing is, I need a pic that reflects just how bleak things are, specifically for this subset of people. Everyone knows that what happened sucks for Bear shareholders, and a lot of the older employees who lost their life savings and the taxpayers who are funding this bailout, but I really want to drive home the cold dark reality for these kids. I already have a cringe-worthy lede-- "Thousands of people are losing their jobs on Wall Street — some before their first day of work. They polished résumés; they sweated interviews; they landed dream jobs. But now a small group of college and business school students are discovering that their careers at Bear Stearns ended before they began. JPMorgan Chase, which bought the beleaguered investment bank last month, rescinded many of their job offers." But I'm not sure it's enough. I really need the readers to feel it. To SEE it. Ya get me?
Photog: Yeah.
Reporter: I interviewed this Penn girl which I was originally thinking would be perfect for an accompanying photo because what could be more bleak than West Philadelphia, right? But since graduation is coming up, Penn has the workers out prettying up the whole damned place. Really threw a wrench in my plan.
Photog: I see your point.
Reporter: Would've been perfectly dreary without the 150,000 flowers they've planted this week. Now, not so much.
Photog: Wait, over by the Stalinist towers... what is that ugly concrete thing?
Reporter: It's a footbridge! A fantastically unphotogenic footbridge!
Photog: We're saved!
Reporter: Okay, now how to pose the girl...I really want it to be reminiscent of one of those war pics. You know the kind...where it's focussed on one child, in a war torn land, looking lost. Forlorn. Etc?
Photog: Yeah. How about...how about...we hire some Asian kid to run behind her, like a Vietnamese running away from an agent orange attack.
Reporter: Oh, that is good, my friend. The one thing we really have to make certain is that she gives us a very sad face, because the jappy Penn-issued clothes might make people question whether or not they should feel sorry for her.
Photog: Right. Yes, in agreement.
Reporter: Oh, and before I forget, can we do something about all the poor black folks that keep wandering on to campus and into the back of our shot?
Photog: I'll photoshop them out. Wouldn't want to upset Times readers too much. It's distressing enough that their friends' kids lost that plum internship/first job, you know? Getting to keep that signing bonus is little consolation, my friend.
Posted by guest , Apr 21, 2008 1:25PM
While she's not my type, I know some associates in Banglore who would probably like to interview her and see if she's a good fit in various positions. I see good things in front of her. I'd bet they'll be behind her all the way!
Posted by NomadTrader , Apr 21, 2008 1:41PM
Not my type either. Much prefer Muffie speaking French I can't understand.
Posted by guest , Apr 21, 2008 2:04PM
"We probably can’t get as good of jobs as we would have had."
We'll just draw a line through Grammar Expert on the alternative jobs list.
Posted by guest , Apr 21, 2008 2:11PM
Worthy satire of the Times' photo! However, to their credit the Times did provide an overview of an issue that had been of concern to a number db readers.
For the umpteenth time, the taxpayers are NOT funding the $29B loan that made the JP Morgan/Bear Stearns deal happen.
The Federal Reserve is self-sufficient, making money from interest on loans and fees it charges banks on certain transactions. The $29B loan comes from existing funds in the Federal Reserve, not from an appropriation of Congress.
The loan is 100% collaterized with Bear Stearns assets, as chosen by BlackRock, the firm the Federal Researve hired to assist it with the loan. The term is for 10 years, and BlackRock may sell assets at a time within the next ten years when the market recovers for these assets. Until the $29B is fully recovered, Bear pays 2% interest to the Fed on the balance.
The impact on the taxpayers may come at the end of the 10 year period, if BlackRock has not been able to recover the full price of the loan. If the Federal Reserve has had a bountiful year, it pours excess surplus into the U.S. Treasury, helping to fund U.S. government programs. If it does not have a good year, there may not be a comparable amount of surplus to pour into the U.S. Treasury as in other years, meaning the U.S. Treasury would have to make up the balance from other sources of income.
The main purpose of the Federal Reserve is not to make money for the U.S. Treasury. That is a happy side effect of good management of the Reserve. The main purpose of the Federal Reserve is to preserve the functioning of the U.S. financial system.
Posted by girl , Apr 21, 2008 2:27PM
haha thats brilliant Bess
Posted by guest , Apr 21, 2008 2:44PM
Well done. This was the lamest pity party yet.
Posted by guest , Apr 21, 2008 2:54PM
@2.11--since you feel so good about bear's collateral, why dont you step and lend them your own cash?
Posted by guest , Apr 21, 2008 2:58PM
Well, similar to the line "well I lost my dog when she was run over by a truck, but at least I saved money by switching to GEIKO"...
If you are annoyed as I am by the quantity and lameness of the NYTimes Weekender ads, you might find this a useful analogy:
"I lost my job offer to Bear, but at least I saved money and my weekend with the NY Times Weekender! Only $3.99 an issue!"
Posted by guest , Apr 21, 2008 3:13PM
http://dealbreaker.com/community/2008/04/petition-to-get-rid-of-ep-and.php
Posted by guest , Apr 21, 2008 3:28PM
@2:54pm. Why would Bear need cash now? JP Morgan is backing its transactions and is about to absorb it completely as soon as the shareholders vote. Of course, I'm not going into the fact that I don't have $29B to lend.
Calling the $29B loan to JP Morgan/Bear a "tax-payer funded bail-out" adds to the public misunderstanding of one of the most notable actions of the Federal Reserve since the Depression. Ordinary people feel aggrieved that the government "helped" Bear out while individuals are losing their homes. The reporting on the transaction has been dismal.
If you told a homeowner that the government would lend him or her X amount of money as long as it was fully collaterized so that person's immediate debts could be paid off, but he or she would lose the house anyway and all but a fraction of the house's equity, do you think they would take the deal?
It seems that it is a political inevitability that homeowners on the verge of foreclosure are going to get some relief, and that may turn out to be a good thing. But anyone who equates foreclosure relief to a collateralized loan from the Federal Reserve that was predicated on the fire sale of a business just plain doesn't get it.
Posted by Eustacia Vye , Apr 21, 2008 3:34PM
Oh sure, the "bailout" has no impact on taxpayers or investors, unless of course you consider the interest you lost in your money market fund in the last three months when it went down from 5% to 2% (with no capital gains) and lower interest coming back to you on any property you're stupid enough to still own, because, of course, a renter's economy is so much more exciting.
Posted by guest , Apr 21, 2008 3:35PM
@3.28--I'm sure jpm would be happy to sell you some bsc paper.
it was a give away funded by the us taxpayer, plain and simple.
Posted by guest , Apr 21, 2008 4:28PM
Where did the Fed get the money?
Posted by guest , Apr 21, 2008 4:52PM
someone throw some cold water
Posted by guest , Apr 21, 2008 5:50PM
For everybody who says it is not a bailout have you everd heard of the idea of opportunity cost? The fed could be earning better rates of return on its money and not be collateralized by awful paper that nobody else wanted to lend against if they didn't BAIL OUT Bear Stearns.
Posted by guest , Apr 21, 2008 5:56PM
The Fed is self-funded by interest it earns on the mostly short-term loans it provides and charges for services it renders. Congressional appropriations (i.e., taxpayer's money) don't pay for the Fed's functioning AT ALL.
It's a requirement of law that all national banks be members of the Fed. State chartered banks may be members if they meet certain qualifications and choose to join. Any bank who is member has to keep a certain percentage of their reserves in the Federal Reserves by buying stock the Fed sells. The stock is not like ordinary stock; it can't be bought by or sold to others, but stays with the member banks. The member banks get a fixed rate of return of 6% on the Federal Reserve stock that they own, again paid for solely by the Federal Reserve.
The Federal Reserve has been in existence since 1908 to help prevent financial panics and runs on banks. It has received various legislative overhauls through the years.
Posted by guest , Apr 21, 2008 6:26PM
much better than that miffy crap.
Posted by guest , Apr 21, 2008 6:49PM
Guest@5:50pm. The point of the Federal Reserve is not to make more money but to prevent financial panics. The Fed is not a commercial bank, so it's not shopping for better interest rates. Its whole purpose is to stabilize the financial system. Whatever you want to say about the Fed loan to JP Morgan/Bear, there was no financial panic the week of March 17 - 21, 2008 following the loan to JP Morgan/Bear, which there might have been had Bear Stearns collapsed and gone into bankruptcy.
Between the Civil War and the establishment of the Fed system in 1908, there was panic after panic, repeatedly ruining the economy. The worst of the panics occurred in 1907, which was the impetus for the establishment of the Federal Reserve system. The misdirection of the Fed during the Depression helped make the Depression much worse than it needed to be, and there was a series of legislative reforms instituted at the Fed. Since those reforms, there have been no panics, so we've forgotten how bad they can be and what the Fed was established to control in the first place.
Guest@3:35pm. Where's the "taxpayer money" you're talking about?
Guest@4:28pm. I have explained where the Fed "got the money." It came from its own self-contained system, not from the taxpayers. A true "taxpayer bail-out" was the huge loan to Chrysler in the 1970s, which was paid for by a Congressional appropriation. (The country did get its money back.)
Guest@4:52pm. Your comment about "throwing cold water" doesn't make much sense. I take it you have an emotional reaction to the idea of an emergency Fed loan to an investment bank. I'd rather hear your reasons than your fuming.
Eustacia Vye, I don't understand why you think the Federal Reserve loan to JP Morgan/Bear had anything to with money market rates going down or the downturn in the housing market. Money market rates are down because the Fed has gradually lowered interest rates since the summer of 2007 because of the lack of liquidity in the market. The Fed's actions re interest rates are entirely unrelated to the JP Morgan/Bear loan. The housing downturn started years ago, and again, was neither caused nor affected by the Fed loan to JP Morgan/Bear.
Posted by guest , Apr 21, 2008 7:13PM
will someone just put that Bear employee back to work...sheeesh
Posted by guest , Apr 21, 2008 7:30PM
I'm not a Bear employee. I'm fully employed elsewhere. I just got interested in the workings of the Federal Reserve. When the Federal Reserve made the loan to JP Morgan/Bear, I got interested in the public outcry. I watched Tom Foreman report the story on CNN on 3/17/2008 and marvelled about how not a single comment he made was accurate.
I wouldn't bother writing to correct misinterpretations in the general community. But I think the financial community should be better informed.
There are plenty of valid grounds on which to argue the case against the Federal Reserve loan to JP Morgan/Bear, but the loan constituting a "taxpayer bail-out" is not one of them.
Posted by guest , Apr 22, 2008 12:15AM
Which goes that you explain things to people (@2:11), and they (@3:35) will still insist on what they insist on, facts be damned.
The "opportunity cost" of the Fed assisting Bear Stearns is the FED not being blown out of the water when the entire banking system and Western world collapse by sitting and doing nothing.
Posted by guest , Apr 22, 2008 8:34AM
I'd rather Trasury spend our tax dollars here and not Iraq. And nobody has any proof that bsc going bankrupt would cause the western world to collapse. You act like a little gayboy who cant find his anal lube!
Posted by guest , Apr 22, 2008 1:15PM
it's ridiculous that huntsman is the only building worth going to on campus.
Posted by guest , Apr 22, 2008 5:36PM
Moody’s Downgrades 1,923 Subprime RMBS Classes
Moody’s Investors Service has decided that it’s finally time to downgrade investment grade subprime RMBS — you know, the Aaa-rated stuff? Between Monday and Tuesday, calculations by Housing Wire show that the rating agency has slashed ratings on 1,923 tranches from 232 seperate subprime RMBS deals from 2005-2007 vintages.
That total includes hundreds of formerly Aaa-rated securities, as Moody’s embarked on its largest round of downgrades to investment grade subprime MBS since the credit crisis began.
http://www.housingwire.com/2008/04/22/stick-a-fork-in-it/
How many of these do you think the Fed is holding courtesy of BSC and its various lending facilities? Where will those losses go now, and where would they have gone had the Fed not accepted them?