Theft
I have very little patient to conspiracy theories, so I will not start a discussion about the possible relations between the fact that the chairman and CEO of JP Morgan is a member of the board of directors of the Federal Reserve and the bailout that made the deal of purchasing Bear Stearns much less risky. The decision is immoral even if it was done without any involvement of JP Morgan:
Get ready. Now that Bear Stearns (BSC) has been forced to run hat in hand to the Fed and whimper that it’s "too big to fail," the mewling is about to begin:
-It’s not our fault! It’s a run on the bank!
-We never could have seen this coming!
-Blame those jerks who stopped lending us money!
[...]
The Fed has promised Bear Stearns savior JP Morgan (JPM) that it will guarantee the value of whatever crap Bear has piled onto its balance sheet. In other words, the Fed is effectively assuming the liabilities of Bear Stearns. And the Fed’s source of capital, ultimately, is you.
Presenting this as a necessity, for the public general good and using the fear of recession, doesn’t change the fact that the proper name for this bailout is theft. Few months ago this was a funny sketch, today it is a reality and not the funny kind.
Tags: Bailout, Bear Stearns, JP Morgan, The Federal Reserve, The Free MarketRelated posts
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