digg

Join DiggAbout

Discover and share the best of the web!
Learn more about Digg by taking the tour.

See the original image at money.cnn.com

Yes, your tax dollars will be used to bail out BEAR STEARNS

money.cnn.com — Today CNBC and other news outlets reported that Treasury Secretary Hank Paulson confirmed what we have suspected. Since this loan was backed by Bear Stearns' worst collateral, worthless assets consisting of subprime mortages, YOUR TAX DOLLARS, $100 PER CITIZEN, WILL BE USED TO BAIL OUT RECKLESS INVESTMENT BANK BEAR STEARNS.

Bury
show profanity settings
expand all
  • gttheo, on 04/02/2008, -16/+79Take a few minutes and complain about this unconstitutional act to Congress and maybe they will do the right thing for once.
    http://banking.senate.gov/public/index.cfm?useActi ...
    • lordmetroid, on 04/02/2008, -6/+36You really think government works for you? LOL!!!
      • Acewrap, on 04/02/2008, -15/+5It will as soon as we clean out the current administration.
        • Aokitsune, on 04/02/2008, -3/+13Clean all of them out to be safe- a lot of politicians have been playing the game too long anyway.
        • SLuM, on 04/02/2008, -9/+10Congress gives authority for everything, and the president executes their wishes. Bush isn't in control, the congress is.
          • neognostic, on 04/02/2008, -4/+10It doesn't become law unless he signs it. If he vetoes it, then they need a 2/3 majority to override it. So who is really in control?
          • weeeezzll, on 04/02/2008, -3/+13Everyone except the citizens of this country?
          • divrekku, on 04/02/2008, -4/+4um... we have a three branches of government, and a system of checks and balances that (in theory, at least) serve to maintain the balance of power so that no one branch rules over the others.

            Go back to your American Government teacher and slap him upside the head for me.
          • divrekku, on 04/02/2008, -0/+2Why is this asshat getting dugg up and I'm dugg down? Don't you geeks realize how government works?
          • biotch, on 04/02/2008, -0/+1Holy crap what in the world makes you think the congress is in control of Bush?!
            Because congress does not have a veto proof majority in either party, all congress can do at this point is stop him from doing any more damage. They can not force him to change any controversial issues because if he vetoes a bill, the repubs in congress have the power to uphold it.
        • weeeezzll, on 04/02/2008, -6/+17You really think that the Democrats are any better? They will just waste our money in different ways. If things don't change for the better over the next 10 years, and I'm going to start shopping around for a better country to raise my family in.
          • aadyss, on 04/02/2008, -11/+6I've been around the world at least 200 times and lived in 4 different countries.There isn't a better country unless you consider less freedoms, small houses and cars, a lower life style in all ways better, than move on out. Maybe you should research some type of therapy that would allow you to deal with life a little better.
          • didiman, on 04/02/2008, -5/+4Please do, the sooner you leave the better. It doesn't surprise me that aadyss is getting dugg down even though he is right. I guess it's because the majority of diggers never leave there parent's basement.
          • divrekku, on 04/02/2008, -3/+7Current standards of living are better in the EU then they are in the US.

            And don't use the argument that "Its worse everywhere else so quit yer bitchin"... because A) it no longer applies and B) people are tired of hearing that from the Republican party.
        • Stochio, on 04/02/2008, -0/+4Ace, the very idea of a bailout is Kenyesian. The idea is supposed to be more in line with Democrat thinking. Therefore, you should be noting no difference between Republicans and Democrats.
    • varmit, on 04/02/2008, -9/+17Actually this is legal. Its being done under an act that dates back to the depression, when a bunch of financial institutions were failing and gives the Fed the ability to help them. Heck, back then the Fed bought land and housing from the dust bowl area and actually made money on it in the long run. This is the same thing happening right now. If the Bear Stearns fails, it could create a cascade effect that takes out many more financial institutions really putting us into a depression.
      • SpykerSpeed, on 04/02/2008, -10/+11It's hilarious to think the government can do anything to "help" the economy. All they can do is print more money, or use debt to temporarily prop up asset prices. They add no value to the economy whatsoever.
        • smorais, on 04/02/2008, -6/+13Clearly you have little to no grasp of what the government can do to "help" the economy. Besides the things you mentioned, government can raise or lower taxes, impose tariffs, and spend on assorted public works style projects. Are you suggesting that these would add "no value" to the economy whatsoever? Perhaps its time for a macroecon 101 refresher.

          Now whether the government should be doing some of those things is another matter entirely, but thats a separate question. I do, however, find it comical that the same diggers decrying this bailout are invariably the same that argue the government should bail out reckless mortgage borrowers, bail out the uninsured, etc. Why? Certainly not because of any logical consistency in the argument. Only because it its your fits your "big business == bad, individuals are helpless, the nanny state must intervene" narrative.
          • SpykerSpeed, on 04/02/2008, -9/+5Government adds no value, it just reallocates resources. If it were beneficial to start a "public works project", the private sector would have already done it. Keynesian economics was cool back in the 30's and 40's, but today it's a little outdated.
          • DRINKxREDxBULL, on 04/02/2008, -2/+4Clearly you have little to no grasp of what the government has already done do screw up the economy. Who was it that created the "easy money" policies that lead the housing crisis?
      • thanakar, on 04/02/2008, -3/+24What we really need to do IS let it fail. This country needs a big adjustment.
        • myuu, on 04/02/2008, -12/+3You won't be so impetuous and sanctimonious when your parents kick you out of their basement because they can't support your Dorito, DSL, Mountain Dew and waking-at-four-p.m. lifestyle.
        • varmit, on 04/02/2008, -7/+2If you let it fail, then you will be jobless and poor within a year and all the money in your savings account and checking will be gone. The only money you will have will be the money you put under your mattress or barry in the yard. Total failure is not good, firing the people that let this happen needs to happen which isn't, that I can agree to that the people that let it happen should be jobless.
          • PeppermintPig, on 04/03/2008, -0/+1The creation of more fiat credit/money causes a loss in value of all money in circulation, no matter how well you hide it.

            Total failure would be bad, but total failure wouldn't happen if you didn't have the Federal reserve tying everyone's wealth together by a single thread.
        • ThndrShk2k, on 04/02/2008, -0/+11"The only money you will have will be the money you put under your mattress or barry in the yard."
          You think Cousin Barry in the yard is worth anything? He got fired a week after you! He's going to be gone with all the money you buried in the yard come tommorow, I say what.
        • ImOscar, on 04/02/2008, -1/+2The Digg population doesn't have a clue as to how the financial world works. Letting Bear Stearns go under would create an economic disaster.
          • PeppermintPig, on 04/03/2008, -0/+1So let's bail out stupidity? You first.

            The people who are actually paying for this disaster are the very same people you say have no clue about the workings of the financial world. Some of those people, frankly, are pissed off.
        • charlesray, on 04/02/2008, -1/+2I don't think you realize what you are suggesting. It's not like we can just let these companies fail and let a better system arise. Letting the economy fail creates what's called a depression; it happened once before and it didn't turn out well.
      • JohnSteel, on 04/02/2008, -1/+14Where in the United States Constitution does it say that the Federal Goverment has this power? If the Constitution does not say that the Federal Goverment can do this then the Federal Goverment can not do it, even if there is some act or law that says the Federal Goverment can.
        • YellowSnot, on 04/02/2008, -3/+4lol, you still think the constitution matters.
        • arjung, on 04/02/2008, -6/+3Commerce Clause?
          "In 1995, Chief Justice William H. Rehnquist delivered the opinion of the Court in United States v. Lopez (later clarified by United States v. Morrison). There, the Court ruled that Congress had the power to regulate only
          * the channels of commerce,
          * the instrumentalities of commerce, and
          * action that substantially affects interstate commerce
          " http://en.wikipedia.org/wiki/Commerce_Clause#The_R ...

          Sounds like bailing Bear Stearns affects the instrumentalities of commerce.
          • redneckblues, on 04/02/2008, -0/+2The Commerce Clause has been bent over a chair since FDR. It's being abused. I could say anything effects interstate commerce; that's just a cop-out.
        • mikesart, on 04/02/2008, -0/+3But Congress isn't the one that did this deal. The Bear Stearns bailout was done by unelected bureaucrats. Big difference. Hussman has a great analysis of why this deal was not legal here: http://www.hussman.net/wmc/wmc080324.htm.
      • kaelyiesta, on 04/02/2008, -0/+1Really? And here I thought that the only government agency that can legally appropriate funds is The House of Representatives. I guess that whole bit in the constitution about "all spending bills must originate from the house" is just a suggestion then eh?

        http://digg.com/business_finance/We_No_Longer_Live ...

        Minus the bold/underlines, its well worth the read. It may even open your eyes a bit.
    • weeeezzll, on 04/02/2008, -4/+3If they don't then thousand upon thousands of retirees will be dead before then can access their retirement funds again. Many will die because they cannot access their retirement funds. They could lose their homes, and all of the things they have worked all of their lives for. They would of course would all become welfare and Medicare recipients, and move into public housing. Their retirement dollars would effectively not be part of our economy for the next 5-10 years.

      Regulations to curtail this sort of this would be better (if at all possible) but we have to respond to a situation, and this is the only reasonable way to do it.
      • Stochio, on 04/02/2008, -0/+13And if we "do" then other banks note the bailout, increase risks and make the next big hit even more severe. That is the unseen effect that will not make news headlines. And so on and so on. There will reach a point where no bailout is possible. You cannot bailout everyone. Everyone cannot free ride. This is unsustainable.
      • chanop, on 04/02/2008, -1/+13I'm 25, and have accepted that I will work until I die. I really don't think there will be such a thing as "retirement" for my generation. I put money into a 401k, but when the baby boomers are all at retirement age and realise they don't have enough money to live comfortably, they're going to bitch to congress to the point that they'll have to tax the ***** out of our 401k's to hell.
    • NJank, on 04/02/2008, -0/+5directly to the contact form
      http://banking.senate.gov/public/index.cfm?FuseAct ...
    • RealHyperX, on 04/02/2008, -10/+13No one was complaining when the government forced banks to give loans to minorities that clearly could not afford them. This is another side effect of affirmative action. We all pay for it now.
      • AaronGNP, on 04/02/2008, -4/+2Yeah, had *nothing* to the greed of the lenders... /sarcasm
        • DRINKxREDxBULL, on 04/02/2008, -0/+4Yea, it had *nothing* to do with the banks being forced to give loans to people that could not pay them back, resulting record numbers of foreclosures.
          • AaronGNP, on 04/02/2008, -4/+0Go grind your ax for affirmative action elsewhere.
    • Brainmodder, on 04/02/2008, -4/+2First of all, let me make the point that if Bear Stearns goes broke, then a lot more other banks go broke. If a lot more other banks go broke, then the economy is well ****ed to say the very least.
    • HenvY, on 04/02/2008, -4/+1What do you think happens if Bear Stearns is allowed to go bust? You think you've seen a recession, you wait until that happens...you're going to be crying to congress then.
    • jdepp, on 04/02/2008, -0/+2if the U.S. goes through with that, they effectively privatized the profit while nationalizing the risk. Seems a bit out of whack to me.
  • 2bsbc, on 04/02/2008, -23/+256I've worked along side men as we battled on the Bering Sea; some with broken bones, giving it everything they had left in reserves in order to pay the man his due; none of them bitter, all of them accepting of their responsibility. I never shrugged these duties because I always believed in the limitless potential of our republic and it's once free market system; therefore, I never asked my government to give to me, what I couldn't get for myself.

    I've owned small business's and provided employment for dozens of men. I've purchased dozens of vehicles, and pieces of equipment; however, this is where I stop. I will not be burdened with paying for some rich punk kids addiction to speculation. I will not be expected to bail out investment bankers. I will not continue to pay into a system that has been broken! It's time for us as Americans to put up or shut up. People have died to provide us with a country that we could be proud of, and all they wanted in return is for us to hold ourselves to the same morals and guiding principals. Instead we have stood idly by as it has been raped and left on the road side bleeding. If you have any honor, any sense of what it means to be a freedom loving American you will be screaming from the top of every roof, until you can scream no more.




    • caferrell, on 04/02/2008, -9/+24I´m with you 2bsbc, but how do we wake up the rest of the zombies?
      How do we get them unplugged from their TV sets?
      • jriggs420, on 04/02/2008, -2/+12by plugging them into a computer?
        • caferrell, on 04/02/2008, -2/+5That is certainly better. There is a plethora of information on the Internet, a lot of it is garbage and some of it is crazy. Since everything is there, real, in depth information as available. It is the whole spectrum from infrared to ultraviolet. Unfortunately TV news is limited to the region from light orange to yellow.
          Many ideas that are commonly discussed in Europe or South America or Asia are spun by the American TV news to appear wacky, dangerous, hateful or anti-American. There are many ideas that are only talked about at length on the Internet.

          On top of that the TV talks to people as though they are dumb. Never do you see in depth discussion about anything important.
          If we can´t ween ourselves off of TV mind control, we will never again have a working representative government.
      • soulkitchen, on 04/02/2008, -1/+3Don't unplug the sets. Hijack the airwaves. 90% of Americans wouldn't care if they saw footage of Cheney at his dinner table working his way through a pile of kittens, as long as they can buy their USWeekly and watch American idol. You've got to show them, then tell them what they should do about it...and here's the kicker, all of this has to pass a Tipping point. You've got to develop a critical mass.
        Take Anon protests as an example of what to do. Decentralized leadership, rallying around a central message.
        Enough of the high level philosophical talk though, here are some concrete steps.
        1. Start with the students, many protests start with those armed with not only knowledge but a sense of idealism that hasn't yet been crushed.
        2. Ensure that your message doesn't get confused with the messenger. Some people will tune you out just because they perceive you to be from "the other side". Don't make the message about republican or democrat, atheist or fundamentalist, urban or rural. Instead avoid these labels AT ALL COST. Make sure that the American people know that the change you're proposing is for their benefit.
        3. Don't dilute the message. Make it about 1 (one) thing. If you start talking about theories on 911, Jewish hegemony, or anything having to do with Illuminati / Masons / et al, you're going to drive off those who are too unsophisticated to juggle more than one variable.
        4. State the facts clearly. If they are heavily based in statistics, finance, or politics you're going to lose the interest of the people who won't exert the effort to understand them. Instead present the facts as you would to a class of 8th graders, lots of pictures, charts, graphs.
        5. Brand your message: Frame you message with (in this case) the quotes and ideals of the founders. They started a revolution based on this same idea. And your goal is to offer our current situation as a parable. Be careful with this, any weaknesses will be exploited so you'll need to assess the vulnerabilities of your brand by playing devils advocate.
        6. Immediately disown anybody who may be a sapper. The best way to marginalize a group opponents goals is to send in your own representative posing as a member of that group to spew hyperbole. Think about the cops who infiltrate peaceful protests in order to escalate them to violence and thus drown out the message.
        7. Use satire to force their flawed logic to the breaking point. The daily show and colbert have been doing this with great success.
        I'm not a pro at this, I don't claim to have all the answers, but I'm as sick of these injustices as anyone. Any edits or suggestions are welcome.
      • battletrax, on 04/02/2008, -0/+3Commercials spreading 2bsbc's comment would help.
    • 0xbaadf00d, on 04/02/2008, -28/+6melodrama++;
      • herkimer65, on 04/02/2008, -0/+2*****. A+++++++++++++++++++++++++++++++++++++++++++
    • runner108, on 04/02/2008, -4/+39Maybe it's time for American's to boycott in large numbers paying taxes?
      • jdmacor, on 04/02/2008, -11/+3Great idea! Weaken the tax base, reduce the governments ability to spend on programs and make everything worse! What programs would get hit? Oh, I don't know; probably education, health and unemployment benefits. But that would sure as heck show Congress who's boss!
        • ponyboy96, on 04/02/2008, -2/+3Actually, education, unemployment, and health (to a large degree) are funded by the state and local governments. Property taxes pay for education, unemployment benefits are paid by companies (SUTA tax), and Health care mostly receives funding from state income and sales taxes.
      • tightscrummy, on 04/02/2008, -0/+4The wealthy already do that and it hasn't seemed to help.
      • sylvok, on 04/02/2008, -2/+1Wont do much good, and it will merely get the IRS on your ass
        • BeyondGoodNEvil, on 04/03/2008, -0/+2Yeah don't want the British to get mad at us colonists! I will have NO PART in this "tea party". I'll sit over in my corner curled up in a ball near the fireplace, next to my master, the federal govt.
    • godseyeview, on 04/02/2008, -20/+45Ron Paul 08
    • Matt2k, on 04/02/2008, -0/+36"I will never live for another man nor ask another to live for me."

      Human civilization has proven time and again that it ***** things up the more it meddles. You may feel it naive that I do not care what happens to Bear Sterns-- I was not stupid enough to take a loan I could not repay. I was not stupid enough to hand out loans to people who could not repay. If related industries fail, then so be it. Those industries were broken, built on shaky foundations of specious credit. I am in charge of my own destiny and I'm furious, furious! Tired of bailing out everyone else's mistakes. Wars, poor investments, scandals, and lies. Who else can I save today?
      • XXXXXXXXXXXXXX, on 04/03/2008, -2/+1Get some perspective, moron.
      • workingsmart, on 04/03/2008, -0/+3Atlas Shrugged. ***** greatest book ever written. I think boycotting the IRS is a good idea. We could bring the government to it's knees. This nation was founded on the principle of no taxation without representation. The people are not being represented when the countries leaders, Dick Cheney in particular, laugh at the will of the people and usurp the system for their own gain. Matt2k, join me in Galt's Gultch.
      • BeyondGoodNEvil, on 04/03/2008, -0/+3Freedom means letting failing ideas fail and winning ideas win, if it means anything. When we socialize the consequences for failing businesses/ideas/philosophies, we make it harder for outsiders to detect which ideas/concepts are superior. We just need to get things back in line with the natural order, where consequences of stupid decisions are limited to the decision maker, and where the benefits of a good decision are allowed to be kept, and not confiscated to subsidize a failing method.
    • ScottyMcBaggs, on 04/02/2008, -2/+13/me shrugs. It would have been way cooler if we were using our money to bail out Bear Gryllz.
    • Matteos, on 04/02/2008, -0/+2Where do I sign up.
      • Knabber, on 04/02/2008, -0/+3At the voting booth, by voting Ron Paul for President.

        No joke, we have this option here people. It should be furthered at local and state levels.
    • ralphthemagi, on 04/02/2008, -11/+15And if you had any sense of financial markets, you'd know that "bailing out" Bear Stearns was the best of two possible options. Now, I know this is Digg, and as of late the general knowledge base of the comment section is rapidly approaching that of YouTube, so I won't get to technical. But first I need to say, with respect to, "...I always believed in the limitless potential of our republic and it's once free market system; therefore, I never asked my government to give to me, what I couldn't get for myself," that if this is what you believe, you don't understand the US economy at all. Precisely the thing that makes the US different from most other economies in the world is its near (in better times, anyway) perfect capital markets. Now, it's not the government giving you anything, but it is the market itself giving you what you could not get for yourself. It's those capital markets that allow small business to function, and that allow people to turn ideas into GDP.

      There were two options: (1) Do nothing and risk a 1929-style collapse of the capital markets, which—like it or not—is the key element which makes the US economy what it is; or (2) Do something (because we already know what doing nothing results in), such as trying to facilitate the acquisition of a company like Bear Stearns by another firm in an attempt to ease tension and prevent massive capital fallout (at least for the time being), in hopes that this can be used as a way to "buy time" for markets to correct.

      Even in a non-total collapse situation, Option 1 means that it's going to be damn near impossible for anyone to get a loan. Anyone. That means you and me, and pretty much anyone with a credit rating under 800. That means the entire US economy comes to a halt, and small-business, which are usually run on revolving lines of credit, are going to just have to close up shop. That means you are going to have trouble getting a credit card, and anyone wanting to buy a home between now and whenever things get better is *****. That means that all of those who did make bad choices, now not only get ***** by having to declare bankruptcy, but end up unemployed and out on the streets, and when you are talking about 2m+ people, that really doesn't help ANYONE.

      Now, Option 2 does, in fact, mean that tax dollars are used as an insurance policy for the purchase of Bear Stearns. It does mean that, as a whole, the investment bank doesn't have to fold and cause everything in #1 to happen. It doesn't really mean that investment bankers are getting a check from Uncle Sam for their reckless behavior. Most of the employees of the firm, especially at the higher positions, had large stakes in the company themselves, and lost buckets of money. I'm sure some people did some illegal *****, and someone, somewhere will probably get indicted for something and get a slap on the wrist. Whatever. It happens. Now, for everyone else, well, they didn't lose it all, so from that perspective they are receiving a bail out. The bottom has been capped for them using tax dollars to provide a floor... sort of. Not quite, but if you want to say that I wouldn't say you're wrong.

      The benefits of Option 2? People can still get loans (although it's a hell of a lot harder). Small business is still possible. The US economy keeps on ticking... for a while anyway. Is it delaying the inevitable? Maybe. Maybe not. No one really knows.

      Fin.
      Ronulans need not reply.
      • 2bsbc, on 04/02/2008, -4/+10You my friend are a socialist. Whether you admit it or not, entitlement programs are your only salvation. No different than welfare.
        • ralphthemagi, on 04/02/2008, -11/+4You're right. How could I forget? Well functioning CAPITAL markets are the fundamental feature of socialism. Clearly, CAPITALism is the new socialism.
      • bpopp, on 04/02/2008, -2/+2Great rebuttal to a well-written comment. Very unusual to see something that so closely resembles thoughtful dialog in Digg comments.
      • bluesnowmonkey, on 04/02/2008, -2/+8Yeah, there's a good reason for everything. We HAVE to bail out failing institutions or we'll have a recession. We HAVE to stay in Iraq or they'll have a civil war. We HAVE to build a wall or the illegals will overrun us. We HAVE to pay welfare and SS and Medicare or the old and poor people will be dying in the streets. We HAVE to give up any civil liberty asked because otherwise the terrorists will get us. We HAVE to subsidize farmers or they'll go bankrupt and stop growing our food. Yet while we do what we MUST, the country is teetering toward doom.

        I say we start doing what is RIGHT in the long run, and trust God or whatever you believe in to sort out the short term consequences.
        • ralphthemagi, on 04/02/2008, -6/+1In the long run, everyone's dead.

          Did anyone say we HAD to bail out Bear Stearns? Did I say that? No. I suggested that we should have, just as we did. Given the choices, that was the best one.
      • Kyzzyxx, on 04/02/2008, -1/+3Fool! If you can't afford it, you don't need it! Credit is an insane idea from the start. Period!
        • ralphthemagi, on 04/02/2008, -3/+0Credit and capital markets are at the very foundation of capitalism. Have fun paying cash for your house.
        • XXXXXXXXXXXXXX, on 04/03/2008, -1/+2You're not an American if you don't have a desire for instant gratification.
      • BeyondGoodNEvil, on 04/03/2008, -0/+3You're essentially saying there are already too many socialized consequences that are interrelated, that we must again redistribute the consequences to avoid a total collapse of the socialized system.
        • emmeron, on 04/03/2008, -0/+3Ain't that the sad truth! Well said.
        • ralphthemagi, on 04/03/2008, -2/+0A socialized system? Seriously, I think some of you have never even read on Wikipedia about places outside of the US, let alone been there. Because we have a Federal Reserve we are somehow socialist? Are you retarded?

          The Soviet Union had a socialist economy. The PRC has a socialist economy. Much of Western Europe has/had socialist economies.

          I swear, the average level of knowledge here is somehow a negative value. It's amazing how many other people support it. Sometimes I just think you guys like using the terms socialism, facism, and Nazism because it gets eyeballs.

          Essentially what I'm saying is the Federal Reserve exists to *try* to help dampen the effects of large economic problems by drawing them out over a longer timeline. If you think that's socialism... well, I don't know what to tell you. Maybe get on a plane and go somewhere, or at the very least—use Google and learn something.
    • thelelander, on 04/02/2008, -6/+2It's really infuriating to see so many people not read the article or have any understanding of the financial markets. The fed is giving JP Morgan a LOAN. Not even a loan actually, more like a credit card. JP Morgan, unless they go bankrupt, will pay all of it back plus interest. The government is always first in line in getting paid. If they were being paid cash it would have to be appropriated by congress.

      The people who are about to get bailed out are the idiot homeowners that took out absurd mortgages. Be upset about that.
      • silentboom, on 04/02/2008, -0/+5Your an idiot on all accounts, if BS ends up being worth nothing the tax payer foots the bill and JP walks away. The homeowners don't know anything about the process, that' why they go to a bank and get "APPROVED" they don't have the choice on it. They see a specialist. The bank policies are set by the banks. They are at fault! And the illegal FED did this with rates that make the rich richer. Intentionally raping the middle class.
      • Keewaydin, on 04/03/2008, -0/+1Thelelander, it's nonrecourse, so if the toxic crap collateral is worth less than $29Billion, JPM walks away.

        Read this, it might help: http://article.nationalreview.com/?q=Yzc3NjIwNWRhO ...
    • imolaavant, on 04/02/2008, -0/+5You can always move... and I don't mean out of the country:
      http://freestateproject.com
    • gttheo, on 04/02/2008, -0/+5thelelander - it was a non recourse loan backed by worthless collateral and now explicitly backed by the Treasury. The taxpayer will end up footing the bill. Read this if you would like to understand more: http://www.hussman.net/wmc/wmc080331.htm
  • AlwaysAwake, on 04/02/2008, -9/+49Screaming will just dissipate energy needlessly. We must at last join together to confront those possessing the idea of authority "to do what is good for us and necessary", if this is ever going to end. This "quasi-private", ghostly, perversion called the Federal Reserve System of banks, a cozy, sweetheart deal between government and private banking, is the only branch of our Federal government lacking in any real, meaningful accountability to the other 3 branches, including the Supreme Court. If this continues to operate with any vestiges of that connection remaining, we are simply volunteers being lead to slaughter, not victims. See the complete BBC documentary series "The Century of the Self", available free at Google Videos ( 4 X 60 min.), or YouTube ( 24 X 10 min. ), depicting how all authorities are contemptuously getting us to volunteer for our own destruction. It is an eye opener worth every second of viewing. Then see if you hate your neighbors badly enough not to join with them to bring this national tragedy to an end. Never trust those possessing the idea of Authority. They will not go quietly into the night.
    • danconia, on 04/02/2008, -0/+5Well put. I hope this is a bit of an eye opener as to why government intervention into the economy tends to be nothing but trouble. The government isn't doing this bail out to help the people who took out loans... they're doing it to help their buddies and friendly lobbyists over in the banking industry from going unemployed.
      Of course the media and government will probably spin it like they're trying to help Average Joe. They're just sleazy like that.
  • cobbwobbles, on 04/02/2008, -13/+109It's funny how McCain is saying 'don't bail out irresponsible home owners!' but it's ok to bail out the banks that can't get their money back after making loans to poor people? Why not let them sort it out themselves, and get the money from the home owners then? Why hold the hands of the people who knowingly gave out *****, over-complicated loans to people who, let's be honest, they knew might get into exactly this type of situation? They just didn't think about the consequences, didn't think it would come back to them when the whole thing collapsed, the lenders just didn't anticipate how widespread these practices were becoming. 21% of my ***** middle class income goes to help executive hold on to their yachts and summer homes.
    • DaDrake, on 04/02/2008, -9/+23In contrast, Obama openly wants to bail out everyone with more government control. The fact is, the ball allready been set in motion and nothing will change this bailout (despite the bad trend it could start). Furthermore, McCain hasn't been supporting this idea and been keeping silent on the issue.... he realizes that its too easy for democrats to accuse him of hating children/families/etc if he speaks against the FED.... which he couldn't stop if he wanted to.

      Instead, democrats are blaiming this on the Bush Administration ..... which has absolutely nothing to do with stupid home owners and greedy banks. It really looks like we are closing into a time of more governmental control. I really dislike this..... I think government should stay out and let bad businesses drown. Yes, your talking about 45-135k jobs and a possibly greater recession ..... but in the long run, its good for the economy.
      • neognostic, on 04/02/2008, -10/+2Cite your source for Obama wanting to bail out everyone.
        • SpykerSpeed, on 04/02/2008, -3/+6Uhm... his speeches, website, platform, the NYT, Washington Post, etc etc etc? Obama is a socialist. He admits it.
        • MrCobaltBlue, on 04/02/2008, -1/+5The whole thing where he's a Democrat?
          • cobbwobbles, on 04/02/2008, -2/+1so I can assume you are for giving Israel 30 Billion a year because you're a republican?
      • NJank, on 04/02/2008, -0/+7hmmm... Bush administration. Well, it's a bit removed, but during the entire housing bubble, the FED policy was a "hands-off approach" to prevent "stifling financial innovation" (Steve Fritts, NYT 2005: http://www.nytimes.com/2005/07/15/business/15mortg ... )
      • cronian, on 04/02/2008, -0/+1The government regulates banks, and they are supposed to prevent the banks from doing anything too risky. The Bush administration failed to exercise any oversight of the banks, and now they need to be bailed out. The bankers conned people into making loans to people, who couldn't afford it, and cashed in their bonuses. They took merely took advantage of the lack of regulation. The problems arise from how the law was changed, when Clinton began deregulating the banking sector.
    • Deathfrogg, on 04/02/2008, -3/+14Hell, if I was making 45K a year I could make my rent on time. I make 35, a third of that is trimmed off for FICA, SS and "health insurance" before I even get the check. The health insurance is a joke, $500 deductable and it gets taxed too. Buck a gallon tax on gasoline and my freinds baking company has seen a 350% increase in wholesale flour prices in the last year.
      Must be nice to be a billionaire. Get all that free money from the taxpayers. Be able to go to the government with hat in hand for a little consideration for your plight.
      "Please PLEASE mr government man, wont you help a poor man out? I need a new clutch for my Mclaren and if I dont get some money I might have to lay off one of the upstairs maids."

      My vote goes to Obama, at least he knows what the word "poverty" means.
      • Stochio, on 04/02/2008, -1/+7Obama would heartily support a bailout. The idea is Keynesian. The idea is Democratic. There is no difference between Republicans and Democrats. You are on the right path but need to think harder.
      • slezzzter, on 04/02/2008, -7/+3There's one problem with your statement. You see, if that billionaire lays off one of the upstairs maids, that maid is going to be living in poverty. The Obama plan is to let that happen, then pay welfare to the maid. The current plan is to bail out the billionare, because that's the person who creates the maid's job.

        Trickle-down ***** aside, both the Bush and Obama plans have the same end result. That is, the maid is taken care of. Under Bush, she has to keep working for her money. Under Obama, she gets it for free.
        • glxyjones, on 04/02/2008, -0/+6So with the precedent the Bush administration is setting, companies can be as cavalier and financially irresponsible as they like because they know that the government will just bail them out if it gets too bad.

          what a joke
          • slezzzter, on 04/03/2008, -0/+0And with Obama's plan, individuals can be as cavalier and financially irresponsible as they like. I'm saying it's all the same. You can't condemn Bush's corporate welfare without condemning Obama's personal welfare. Deathfrogg was trying to say that they are different by suggesting that Obama would handle things differently. Different approach, yes. Different result, no.
        • EGFP, on 04/02/2008, -0/+1I think you are on the right track. The only thing missing is the fact they have so much money of their own invested, that is why they are bailing them out. Think about it. There is noway this economy is going to get any better by helping out this company, it is going to bide time.
          I was talking to a gentlemen the other day and he said it was a "necessity" to "help them out". I asked about all the home owners, what about them. He said it was their fault for not reading the fine print and when something sounds to good to be true, then it is. Then I watched him jump into his tricked out 2008 Land Rover. There are too many people that think this way. Until it affects them or a family member, it is like it does not exsist. We have buckled down to not buying many treats at the commissary. And we buy at whole sale cost, with no tax.

          If there was a person that makes $20 an hour and works 8 hour days, M-F, $3200 a month, after taxes roughly $2656. Rent here in my town, $1400, (cold outside) utilities $180, groceries for a month $240, car payment/insur. $400, gasoline $ 250 Rav4 4cylinder, leaves maybe $186 a month. If you have a cell phone take away some more money. Would that be about right?
          There was a point when we first got married, no kids, we had $25 left over a pay period (1st and 15th). I found a job being a nanny and made more money in a week then he did as a PFC for a month. If we had to feed another mouth off of that, wow! Just in 2004 we no longer qualified for food stamps. He was a SSgt, E-6 at the time.
      • cobbwobbles, on 04/02/2008, -1/+1There is a problem with your statement too, Obama's and Bushes plans have nothing to do with welfare or unemployment, you went off the subject so you riff on your Repub rhetoric.
        • slezzzter, on 04/03/2008, -0/+0They have everything to do with welfare. Bush = Corporate welfare, Obama = Personal welfare. However, I was saying that corporate welfare becomes personal welfare when it is, essentially, subsidizing jobs. Since I never condoned either course of action, I don't know how that is considered "Repub rhetoric."
          I think someone is just pissed off that a comparison was made between Bush and Obama and that the difference turned out to be small. Get used to it, because when he wins, it'll happen all the time.
    • jdmacor, on 04/02/2008, -1/+8Seriously, everyone needs to just think back to their macro classes. Businesses and individuals (mortgages) should be allowed to fail, except for one exception! If they are too big!! It is an unfortunate truth that Bear Stearns COULD NOT be allowed to fail. Not because there are insiders, but because of what kind of hit that would deliver to the financial system. Markets would dry up; trading would seize up. It would at the very least be catastrophic and at worst bring down the financial sector.

      You are right, to the extent that Bear Stearns did make careless decisions. But you can't let them fail because they are too big. It is a macro-economic conundrum, but the Fed just cannot allow it. Imagine if, like during the depression, banks had to close for a week. Do you realize what would happen to the economy? The Fed does what it can to avoid repeating those mistakes.
      • jpy321, on 04/02/2008, -0/+1I'm happy to find a voice of reason in a sea of Digg idiots. They should stick to talking about WoW and Ubuntu and things they actually know something about.
    • dpazar2, on 04/02/2008, -0/+1Guess what...Taxes that the rich are paying will go to helping out this whole situation...everyone is paying. I have no problem with the government helping out Bear Stearns...the problem i have is the Government not helping out Ginnie Mae, Freddie Mac and Freddie Mae, all who have extremely devout standards on loan processing and the ones who end up buying these ***** loans from smaller fraudulent banks. With out the big three institutional banks, our country would go to *****. If you will help out stearns, help out the ones who drive the country's lending.
    • jpy321, on 04/02/2008, -0/+1Would you have preferred that Bear Stearn go bankrupt, jeopardizing our entire financial system? By the way, Bear Stearns shareholders lost their shirts, and many of its employees will lose their jobs, so simply stating that Bear Stearns was "bailed out" doesn't paint the whole picture.
  • americangoy, on 04/02/2008, -12/+148"Yes, your tax dollars will be used to bail out BEAR STEARNS"
    Nawwwww pshawwww really?

    So you are saying that the CEO who drove the company into the ground with rampant speculation, will walk away with $230 million retirement, while collapsing the US economy house of cards, and now the company that should be allowed to fail will be bailed out by the FED to prop up this USA economy house of cards?

    Well,,, DUGG :-)
    • jbrown23, on 04/02/2008, -0/+2How about laws to take the bailouts/penalties directly from the CEOs, Board of Directors, and such personal fortunes? They caused this mess by violating their fiduciary responsibilities so they should pay. If we required actual and complete open disclosure; investors could discover the crap before it exploded and then the responsible parties actually held responsible.
      • Memitim, on 04/02/2008, -0/+1I don't see anything wrong with that, and there is already a precedent in the fact that CFOs are held personally accountable by SOX regs to the point of being criminally liable. These CEOs stand at the apex of the actions of a company and reap insanely huge benefits for it and yet almost completely avoid reprocussions when the actions of that company not only fail to produce profit but lead to unemployment and threaten the economic welfare of the nation.
    • mrraven200, on 04/02/2008, -0/+1JBrown has it right. It was the invention o corporate personhood after the civil war that allows CEO and CFOs to take these big gambles then escape scott free with a golden parachute. If they know they were going to be legally repsonsible for their actions and might lose the pool and the Jaguar they might be a little more careful about rampant speculation. It would also increae personal resonsability which con-servatives claim to like.

      http://reclaimdemocracy.org/personhood/

      You conservatives do want personal responsibility for all economic classes, right? if you are just for welfare for the rich then you are corporatists and corpratism quite literally equals fascism:

      http://en.wikipedia.org/wiki/Corporatism

  • Look4Truth, on 04/02/2008, -14/+121America should be screaming about this but instead they'll cheer it because the idiot box tells them it's a good thing.
    • caferrell, on 04/02/2008, -3/+7Amen.
      So what can we all do? Really?
      • dpazar2, on 04/02/2008, -1/+1Pay your mortgage and outstanding loans.
      • pakakapa, on 04/02/2008, -0/+01st step: get the CEOs and guillotine them
    • Unzorn, on 04/02/2008, -8/+8And some guy on the internet is telling you its a bad thing.
    • Lavar, on 04/02/2008, -3/+7I would hate to see what would have happened if they didn't bail them out. There is a good chance I would be filing for unemployment if they didn't. I would rather see a company bailed out than plunge into a depression, even if i don't agree with it.
    • legendxx, on 04/02/2008, -12/+6LOL - One of the largest lending institutions and corner stone of our debt-based society goes under and we should just sit around. Sorry diggers, but anyone with any brain knows that it would be disastrous if this company dissolved. But yeah, listen to the guy on the internet who probably loves Ron Paul's economic plan because it's simple enough for his tiny brain to understand. Capitalist system's are complicated as hell.. don't ever take anything information about it on the net for face value.
      • j0ew00ds, on 04/02/2008, -2/+8It is NOT inherently complicated. Endless regulation and meddling have only served to MAKE it complicated. It's quite simple really. One party provides a service, the other pays for it. This idea scales when people are responsible and earn their way but we've been subsidizing laziness for years.
        • legendxx, on 04/02/2008, -3/+6Congrats, you understand high-school economics. I guess you're ready to run a world-wide financial institution. Just like Enron, there are holes in our system and I'm sure they will be evaluated.. but if you're suggesting that we let this company dissolve just to teach a few executives a lesson and condemn a large percentage of citizens to years of financial hardship, then you really have to re-think your position.

          This is the government making the best of a ***** situation. Simple enough for you?
          • caferrell, on 04/02/2008, -1/+5It has purposely been made complex, but beyond that there is this pervasive, antidemocratic idea that one reads on all these threads, that capitalism is much too complicated for simple minds to comprehend. The test of whether someone is ready to understand our financial systems seems to be this: If the person can say that the entire system is very complicated and that all these different companies are interconnected and if one falls they all fall - then that person understands. If the person has any other opinion, even if it is based on some of the writings of the 20th century´s most brilliant economists, then that person is too simple to be commenting on topics that should be left to the adults.

            ***** Mr. legendxx. You are just regurgitating what you have been fed. As they say, follow the money.... your opinion basically enjoins us to take taxpayer money to bail out the rich. If we don´t then more of the rich will lose money and become poor. Dude, if the rich were truly concerned that they were all going down, they would use their OWN capital to save Bear Stearns. The fact that they don´t is a clear indication that they aren´t too worried and you just got taken for a sucker for the thousandth time this year.
          • legendxx, on 04/02/2008, -1/+1Where did I say anything like that? I've said a large percentage of American's would suffer financially for a period of time if Bear Stearns was allowed to wither away and die. Is that not true? Is it nice to see our government investing in the financial future of these poor saps who are victim to poor decisions of a CEO? I think so.

            You seem to be on the same boat with 99% of everyone else on digg. Government, corporations, upper-class, republicans are the evilest bunch of people to ever walk the planet and if they all died out tomorrow the world would immediately, and indefinitely, be a better place. That simply is not true, and fluctuations of this magnitude, like destroying these individuals financial situation who were affiliated with bear-stearns, very rarely lead to good things.
      • Stochio, on 04/02/2008, -1/+5Lesson learned: a benefit of mergers and acquisitions is an increased chance getting bailed out by the gov't because more people depend on you.
    • djk21108, on 04/02/2008, -1/+2Can't wait till your bank goes under. Then see how little government interference you want.
      • marksven, on 04/03/2008, -0/+2The FDIC and Federal Reserve must protect the insured deposits of banks, yes. However, Bear Stearns is NOT a standard bank, and does not have to follow the rules that all other banks have to follow, such as keeping minimum reserves and leverage. Bear Stearns can go take all their money and borrow 70 times more and bet it all on the roulette table if they want -- and if they lose it's illegal to use taxpayer money to bail them out!
    • battletrax, on 04/02/2008, -0/+4"Kill your televison, the revolution will not be televised." - Norma Jean
    • BeyondGoodNEvil, on 04/03/2008, -0/+1And yet people still believe democracy is a good thing. Democracy means rule by the media, since voters only vote according to what that box says.
  • markdr123, on 04/02/2008, -7/+25If you lived in the UK, you'd be used to it by now.
    • Buddhaismybuddy, on 04/02/2008, -1/+1I wish I lived in the UK more and more everyday, or anywhere else for that matter.
    • MrLlama, on 04/02/2008, -1/+0What are you talking about?? Northern Rock? If so then that was significantly different to this case and you have no idea what your talking about.
    • Gesiwuj, on 04/02/2008, -2/+1The same thing happened here (in Britain).

      "Northern Rock", a building society, went under and the government nationalised it. And we didn't have closed-minded neoliberals insisting this is some huge government conspiracy.

      Besides, what's the other alternative? Let Bear Stearns fail, and completely escalate the credit crisis?
  • slabdigger, on 04/02/2008, -12/+9got rage?
  • mayhemt, on 04/02/2008, -15/+9Atleast my tax dollars are not shedding blood...
    • lordmetroid, on 04/02/2008, -6/+6Right... How do you think taxes are paid?
      Coercion, kidnapping and violence will happen if you don't cough up your doe for their so called protection. Your tax dollar not being used for shedding blood. Delusional, only difference is that it is your neighbours blood!
  • ronjohnson, on 04/02/2008, -11/+78Why isn't anybody going to jail?
    • StGhurka, on 04/02/2008, -4/+2That may still happen. There will be investigations.
      • Acewrap, on 04/02/2008, -1/+9Investigations. Right. I'm sure that'll get real far. I expect a pardon on George's last day for all of these corporate criminals.
        • Wargalas, on 04/02/2008, -0/+1Well if you're going to throw Presidential pardons under the bus, you owe it to everyone here to throw Clinton under the bus for his pardon of tax cheat and Clinton Library major donor Marc Rich.
    • cotaskmemalloc, on 04/02/2008, -9/+8Because no one did anything wrong.
    • bosssmiley, on 04/02/2008, -1/+26Answer: They own the jails.
    • clyde2801, on 04/02/2008, -5/+2Because someone has their lips around someone else's c#@k..
    • dpazar2, on 04/02/2008, -1/+4No, many many people did many things wrong. Applicants for loans lied about what they made, the people processing the loans did not even check to see if these liars made what they did. Processors would hike up FICO scores. Went to a sub prime conference yesterday put on by those who are in direct contact with Capital Hill...New regulation will allow investigators to not only go after assets but also those who lied (applicants) to get a loan and those who fraudulently tinkered with applicants scores.
      • 2bsbc, on 04/02/2008, -0/+1Don't forget the fraudulent ratings by the mono lines too.
      • slicerace, on 04/02/2008, -0/+1Ugh -- good to know at least something is being done about this. I am usually an opponent against government regulation but this whole mess has convinced me that we cannot trust mortgage companies to act responsibly without some sort of regulation.
    • robche, on 04/02/2008, -1/+3because jails are for real criminals... you know, people who smoke pot and such. the dregs of society
      • Wargalas, on 04/02/2008, -1/+1God damned hippies! :)
      • moush, on 04/02/2008, -0/+1If you go to jail for smoking pot, ur doing it wrong.
  • pcbene, on 04/02/2008, -28/+17OK, it is actually a good thing. In the long run, preventing the collapse of an American supercompany will benefit every single American. Stocks rose a record amount on this news; you guys need to have a bit more faith in our government.
    • Mervz, on 04/02/2008, -2/+25Wait one minute here- this is not a good thing. Bailing out private companies whenever they ***** up only promotes more recklessness. If people actually did lose their jobs when they made a bad choice- we wouldn't have to pay for their mistakes. A government bail-out is not a cycle ending move- it's a cycle promoting action. More so, because this bail out money is simply printed out of thin air, the dollar in your pocket is worth less and everything you buy is worth more. Good thing? GOOD THING?!! What are you thinking?
      • unleasheduncle, on 04/02/2008, -6/+0This isn't a 'bail out' from how I understand it.

        Bear Sterns is being bought out, and the Fed is just backing up some of the riskier parts of the loan. If Bear Sterns was allowed to flop, several other banks would collapse too, and we would quickly be in a crisis.

        Also, they're not being purchased at a fraction of what they're worth.

        I prefer to think of it this way - someone above said it's going to cost every person about $100 dollars, should the fed actually have to pay out for these loans. Well, we're already getting on average a $600 stimulus check, which is pretty much useless anyway. So really, we're just netting $500.
        • SpykerSpeed, on 04/02/2008, -0/+2The fact is these policies promote the same kind of risky behavior they're trying to fix. Government can't continue to coddle investors who ignore common sense at the expense of the economy. BTW, as I said above, government can't add value to the economy like a business can. It's simply a value reallocator.
          • unleasheduncle, on 04/02/2008, -0/+1I think I see where you're coming from, and I completely understand the anger/frustration at the perceived 'government bailout', but if we let every single company that had an over saturation in the sub-prime mortgage fold up, won't we be in a pretty serious crisis?

            As was said before, it's not a bailout of Bear Sterns; Bear Sterns won't be a company after this, they'll be fully owned by Chase. The government is just backing the riskier parts of the deal, which are those sub-prime mortgage securities. Like the commenter way below said, they're still worth something, the Fed actually stands to make a profit on this if it all goes well, and even if everything goes south this move will ultimately help the economy, and thus every one of us taxpayers.

            Please keep responding, I'm really enjoying this discussion!
          • SpykerSpeed, on 04/02/2008, -0/+1I appreciate your contribution. I understand the need to keep these banks afloat, but I also see an alternative route to fixing the situation. If the government hadn't used taxpayer money to collateralize the subprime mortgage debt, the private market would have just snatched up all the homes (like it's going to do anyway for the vast majority of these cases). We need a correction in the housing market. Prices are still too high, and the people who bought in at an inopportune time (recently) should just suck it up and realize their home is primarily a tool to shield them from the elements - not an investment. Your primary residence should never be considered an investment, in my opinion.
        • Stochio, on 04/02/2008, -0/+1It is a bailout. Cash is an asset. Risk is a liability. There is a huge liability on "our" (the people's) balance sheet. If it isn't a bailout then why wouldn't a private investor arbitrage? This is a bailout.
          • unleasheduncle, on 04/02/2008, -1/+0If you say it's a bailout enough times in a row, does that make it true?
        • slezzzter, on 04/02/2008, -0/+1That's just plain wrong. We're not "netting $500" because that $600 was taken from us in the past. Most of us paid more than that in taxes for 2007. For anyone to profit from the stimulus, it would have to be a full refund of '07 taxes plus some amount more.
          • unleasheduncle, on 04/02/2008, -0/+0You're absolutely right - I was just looking from it at a different angle.

            Taxes are inevitable, and it's money that, for most of us, was taken directly from our paychecks, so we never actually had it in our hands. It's money that you didn't expect to get back, money that you didn't plan on, therefore you could see it as a net gain.
        • Hillsfar, on 04/02/2008, -0/+1The stimulus check reduces the amount of taxes the government gets to spend, so government will borrow more to spend. Which means we're still paying for it in the end - it's only deferred slightly but with interest (otherwise known as compound interest working against us.)
      • legendxx, on 04/02/2008, -1/+2Not if this private company is a corner-stone extension of our economy works. Stop reading just the surface to this story and think about it before you complain about how our big bag government is screwing up yet again. They do manage to get a lot of things right.
        • emmeron, on 04/03/2008, -0/+1If it is a true cornerstone to our economy, it just means our economy is a total failure in this state. Thankfully, it's not. Sadly, the real cornerstone is worse: the Fed. That's ***** beyond all repair on inception.
      • Lavar, on 04/02/2008, -2/+2Would you rather have your dollar worth a little less or see our whole economy bomb? Its not a good thing but its not the worst that could happen.
        Fix it. Regulate the market so it doesn't happen again.
        • Stochio, on 04/02/2008, -0/+1With what regulations? The "right" amount of leverage? The "right" amount of risk. There is no free lunch. You will pay.
        • conrail, on 04/02/2008, -0/+2Fix it. Regulate the market so it doesn't happen again.

          You forgot "punish those who made it happen in the first place"
        • Lavar, on 04/02/2008, -0/+1"With what regulations?"
          They can start with regulating it so they only give loans to people who can afford it. To be honest i don't care if some family takes out a loan they cant pay and then go bankrupt. I do care when the lenders do it on mass scale and it effects the whole economy.
          "You forgot "punish those who made it happen in the first place""
          I would agree with that. They got it half right.
          • Stochio, on 04/02/2008, -0/+1The Community Reinvestment Act is established "regulation" that encourages malinvestment in the name of equality. Regulation that "people can afford it" pretends that this is an either-or decision that is even capable of being decided. It isn't. Someone will disagree. In fact, many will say we should give cash to those that *cannot* afford it in the name of equality. There are a million possible circumstances to consider when writing a loan. Such a decision cannot possibly be encompassed in legislation anymore than I can regulate the "right thing" for me to eat for lunch. "There ought to be a plan" completely discounts the far more subtle and nuanced alternative of planning by millions of individuals.
        • kreneskyp, on 04/02/2008, -1/+1regulation??!?!?!?! you mean the concept of "make bad business decisions and go bankrupt" isn't enough? losing money and going bankrupt is the penalty these people should face.

          The economy will suffer but don't think for second that it will destroy it forever. If this business is truely a cornerstone of our economy then someone else will come along to fill the need. Theres plenty of other people willing to make money.
    • neognostic, on 04/02/2008, -0/+7Yes the stock market did rise, because it was a bailout, so they know they can go on making bad and risky investments and the government will bail the big companies out, but not help the little guy.
    • SpykerSpeed, on 04/02/2008, -0/+6Stocks rose 3% because of speculation, not real effect on the government. You obviously have no understanding of how equity markets work - they're not directly linked to the health of the economy, they only reflect the sentiment of investors.
      • Lavar, on 04/02/2008, -0/+1How much would it have dropped out of speculation when Bear Stearns went bankrupt?
        • SpykerSpeed, on 04/02/2008, -0/+1I'm not sure, but it wouldn't have been a total loss. Even poor investments are backed by some collateral. Riddle me this: if housing prices dropped another 20%, how would that necessarily be a bad thing? That's a 20% discount for all the folks who would love to be able to afford their first home. Everything in the economy is a double edged sword, which is why so many people don't get it.
        • Lavar, on 04/02/2008, -1/+1Yea its great for people that are looking to buy a new home. It is also horrible for people that just bought a home before the fallout. Now they get to pay 200,000 for a house worth 160,000 because their neighbors took out loans they couldn't afford.
          • SpykerSpeed, on 04/02/2008, -1/+1That's what happens when you leverage. Ask any Wall Streeter.
    • Matt2k, on 04/02/2008, -0/+9"Stocks rose" is meaningless to me. As we've seen, a stock evaluation is ethereal value based on public opinion of its worth. Stocks are manipulated by rich people to become richer. The fact that people can become wealthy by simply manipulating stock values and contribute nothing else is disgusting.

      1. Reward good CEOs for their worth, penalize bad CEOs for their blunders. Make it part of the contract. If any illegalities are involved, like Enron, put them in prison.
      2. Don't invest in banking companies that make stupid decisions and be prepared to lose your money
      3. Be prepared -- if your company is doing stupid *****, you're going to go bankrupt. And the government should not be bailing you out.
    • 3drage, on 04/02/2008, -0/+1More inflated economy to add to the increased inflation of the dollar. More rewards for the irresponsible. Dugg down for an ignorant outlook on the state of the country.
    • pakakapa, on 04/02/2008, -0/+0just don't complain when they have to raise taxes to pay for that *****
  • shervin2, on 04/02/2008, -17/+11Thank god I live in Canada.
    • peterschussheim, on 04/02/2008, -5/+3thank god I dont live in canada!
    • altgeeky1, on 04/02/2008, -0/+4>Thank god I live in Canada.

      You DO realize that there is a coalition of non-Canadians wining an dining your Federal government in an effort to change that fact, right? Canada is RICH in resources and people-sparse. You can expect a push for a North American Union along the lines of Europe... one clause of which is _unrestricted_ business and migration.
    • mparker7410, on 04/02/2008, -0/+1Quite hat.
    • MyBacchanalia, on 04/02/2008, -0/+1Yeah, Canada is pretty swell right now but honestly, although our banking system can't (purposely) collapse like it can in the states (no fed), it doesn't mean we're immune to the worldwide economic ***** that's going to hit in the near future.
      And for realsies, North American Union (I predict Denver as capital) to the max. lol check the synopsis for the miniseries "The Trojan Horse" playing on the CBC right now:

      "Tom McLaughlin (Paul Gross), former Canadian prime minister, watches from the sidelines as a majority of Canadians vote for union with the United States of America. The Canadian flag comes down and the country is redrawn into six states.

      In revenge, McLaughlin -- secretly backed by three key European nations -- runs as an independent for President with his ex-wife, Texas Governor Mary Miller (Martha Burns) as his running mate. An assassination attempt boosts his credibility with voters. Veteran British journalist Helen Madigan (Greta Scacchi) is probing the London shooting of her adopted son –- she too gets targeted for assassination after she uncovers a computer program designed to fix the votes in the next U.S. election. She believes McLaughlin is an honest broker and she looks to him to expose the corruption in President Stanfield's (Tom Skerritt) current U.S. administration, an administration hell-bent on invading Saudi Arabia to cut off China's oil supply."

      haha....*****.
  • KyloOb, on 04/02/2008, -16/+9This happened in the UK a while back, and it sucks, but its not for the benifit of that company, its for the benifit of its customers. So take the sticks out of your asses and think that this might just help; regulation will increase to enusre that this doesnt happen again, the bank will put cash back into the economy, as will the customers. If you guys can spend trillions killing iraqis, why not spend a bit on yourselves everynow and then? Treat yourself.
    • DaDrake, on 04/02/2008, -4/+7Hate to break it to you .... but regulation by the government ***** everything up. Businesses have a strong incentive to make money (or else they go broke). You take away that incentive .... you got yourself another bad governmental bureaucracy like the airline industry.

      In other words, whatever government touches turn to *****.
      • masonreloaded, on 04/02/2008, -0/+6While I dont agree that "everything" the government touches turns to ***** - I agree that you need to keep the incentive to succeed in the free market. We hear so much from Republicans about "free market solutios" is the best thing and that it should be left alone - then, in a case like this, they won't let the downside of a free market happen. Market forces have dictated that Bear Sterns fail - why prop it up? They dont believe in "punishing success" through taxes, so why should they agree to reward failure in this case?
        • KyloOb, on 04/02/2008, -0/+0The point is obvious, but they're not bailing out Toys 'R' Us, this is a bank with large numbers of American customers who would be screwed if the company crashed. It is a force against the free market, and that only hurts the investors and customers of other organizations, but in this case it won't hurt any of them; the bank's are in a stalemate of trading and the customers of other banks will benefit from a revitalization of the economy and a large bank like this 'SHOULD' do a good job in funding the economy.

          To DaDrake, the sub-prime issue is what caused all this mess, everyone knows that and maybe the government do too. The regulation the government will be looking at is regulation to make sure the banks offers little sub-primes and as many prime mortgages as possible, and that they reasonably trade with each other. I'm no tasking for a fully state run system or a fully independent one,but when tax payers' money is in the balance, you better hope the government is there instead of a profitable business.
    • cyberdork, on 04/02/2008, -0/+4You are right.
      What Americans should be really pissed about are their oh-so-beloved free market capitalists on CNBC and in Congress, who all of a sudden demand more government intervention...
      Like all right wingers, they always adopt their 'ideologies' to the way which will guarantee them maximum profit. Bunch of repugnant hypocrites.
    • bosssmiley, on 04/02/2008, -0/+1Northern Rock's customers and small investors were *already* protected by British banking rules. The government only stepped in to save the bank's ass, not the investors or the savers.
    • gotamd, on 04/02/2008, -0/+5Bear Stearns has no retail banking presence. I don't know what customers you're talking about.
    • srondizzle, on 04/02/2008, -0/+0I'm pretty sure the point of the article is that the average American, the people who the US government SHOULD be looking out for, will suffer more in the immediate future because of this. Nobody who is truly affected by the housing crisis is thinking rationally about how bailouts will eventually help them decades down the line.

      I mean, I care about being able to pay my bills now, not 10 years from now. I'm pretty sure that's how most people feel.
  • Micoderre, on 04/02/2008, -19/+12$100 out of my pocket ... or the collapse of the credit market caused by the fall of Bear Stearns. Hmm. Seems like the Fed made the right decision.
    • an0nymous, on 04/02/2008, -5/+5Yes, thank goodness they managed to put that off. Why it's nothing but smooth sailing ahead!
      Sure it's anti-free-market and creates moral hazard, but at least it solves all our problems!
      • legendxx, on 04/02/2008, -1/+2Let's see.. let the business dissolve and cause countless American's years of grief and incredible financial hardship.. or teach those bad execs a lesson by letting their company fail? Which would you choose? We're not bailing out execs who made some bad decisions, we're bailing out a cornerstone of our economy. Stop taking financial advice from bloggers.
        • an0nymous, on 04/02/2008, -0/+1We have a difference of philosophy, I think. Mine is this: the free market must be allowed to work. In fact, it will work *eventually* regardless of the attempts to influence it. That's why state controlled economies suck. Also actors who correctly perceive value must be allowed to profit on such a correction. I am talking here about stock shorters, commodities purchasers, and others who profit on recognizing market inefficiencies regarding valuation of equity. The market is the greatest tool for alleviating human suffering on earth. Why in ***** sake do you want to impede it? It's thinking like yours that got us in this situation and will only make things so much worse when the correction eventually comes.
          Secondus: Inflation. "Helicopter Ben" is dropping money with ink which smears, it's so recently printed. Seen the M3 numbers lately? I wonder why not? The economy is a plate spinning on a pole and we're buying the clown drinks.
          Gold is a buy at 10,000$ an oz. I only pray that the darker rumors (completely artificial suppression of the price of gold is the least of it) about the Plunge Protection Team aren't true.
        • Stochio, on 04/02/2008, -0/+5Step 1: Pickup passenger in taxi cab
          Step 2: Accelerate to 130 MPH
          Step 3: Demand $200 to slow down or "I will crash and that's bad for both of us"
          Step 4: Thank you have a nice day.

        • thugok, on 04/02/2008, -0/+1Actually, unless these execs are fired and barred from holding another job in a financial institution, then yes, we are bailing them out.
        • 3ugene, on 04/02/2008, -0/+1Step 5: Profit!
  • Cablewife55, on 04/02/2008, -5/+35Sadly, this is one article written on April 1 that is not a joke.
  • DaDrake, on 04/02/2008, -12/+17And what is Obama position on this? Oh yea...
    • Tenbatsu404, on 04/02/2008, -2/+4Increase the capital gain tax.
      • 3ugene, on 04/02/2008, -4/+4Cite a source because I don't think he's got the knowledge to even speak on such a topic.
  • getjustin, on 04/02/2008, -8/+14With what money? Oh, that's right, China's money. That's what happened when you keep saying tax cuts while spending more than any president in history. Thanks, Jorge.
    • 3ugene, on 04/02/2008, -0/+5We haven't had a president who spent less than the government took in as revenue in a long time.. The only one who has a goal of less spending than revenue is Ron Paul. So basically, our economy is *****.
  • Delphium226, on 04/02/2008, -9/+17Phew... and there we thought our tax dollars might be used to give better healthcare to children. Forget social welfare, we want corporate welfare!

    /sarc
    • cobbwobbles, on 04/02/2008, -0/+3That is exactly the kind of socialism Republicans prefer, Corporate Socialism.
    • joe122370, on 04/02/2008, -2/+1yes use our tax dollars to bail out fat ass lazy people who won't work and pay for their own damn healthcare. You're promoting the same damn thing with different people.
      • Delphium226, on 04/02/2008, -0/+2Ah yes, a 'compassionate conservative'.
    • dpazar2, on 04/02/2008, -0/+1Just remember...corporate welfare in the US (Oxymoron) I remember an article that showed the Corporate tax level around the world, and the US was right at the top or top 3. SO there currently isnt much love for Corporate America. Everyones' views are wrongfully distorted by a few few bad apples. Look past that ***** for once.
  • cotaskmemalloc, on 04/02/2008, -56/+115Christ, you anti-Fed people really are ***** dumb.

    1, it's a LOAN from the Fed to JP Morgan for $29 billion. They didn't just hand them that money and say go buy yourself something pretty - it's a loan that JPMorgan has to pay back over some period of time. Did any of you ***** idiots with tin-foil hats read the part of the article that states 'and is taking billions of dollars worth of mortgage-backed securities owned by Bear as collateral'. It's a ***** loan, and JPMorgan has the ability to pay it back.

    2, financial stability is most certainly worth the Fed loaning JPMorgan that money. To anyone who says that the economy would have been fine without the loan - you're ***** stupid. ***** would have hit the fan real hard, and you'd be singing a different tune today.
    • mike17032, on 04/02/2008, -21/+17Of course they are stupid, these are the same ***** hoarding gold thinking they are gonna come out ahead when "the greatz collapse happens".

      To bad they are in for a rude awakening, you cant eat gold. It will have no value either.

      Not that things are likely to collapse anytime soon anyway.
      • Aokitsune, on 04/02/2008, -3/+14You can't eat money, so what's the point of even having any?
        In all honesty, the entire system involves trading useless stuff for something worthwhile, all on faith that the useless (i.e. money) will always be exchangeable.
        • legendxx, on 04/02/2008, -6/+2You poor thing.. you're head will explode if you ever take a philosophy class.
      • Metasquares, on 04/02/2008, -1/+4"To bad they are in for a rude awakening, you cant eat gold. It will have no value either."

        That's why I invested in corn! :)

        Actually, that's paid off very well so far.
      • 3ugene, on 04/02/2008, -1/+6You can't print more gold. That is why it is more stable than the dollar.
    • masonreloaded, on 04/02/2008, -5/+27The plummeting value of those "billions of dollars worth of mortgage-backed securities" are the reason that Bear collapsed...
      • xadhominemx, on 04/02/2008, -1/+4No, not "those" mortgage-backed securities- sub-prime credit is what affected Bear Stearns. And a loan to JP Morgan is not anywhere near sub-prime.
    • LFAB, on 04/02/2008, -5/+18JP Morgan is getting Bear for a song. The Deal of the Century. The people who were screwed here are the Bear Stearns shareholders. This is one case where what happened was actually in the best interests of Joey-bag-o-donuts (taxpayers).
      • Parliament, on 04/03/2008, -1/+0Actually the shareholders were saved here. The reason Bear had to be sold was because it was gonna have to go into bankruptcy otherwise. In a situation where a company goes into bankruptcy, the shareholders are the last in line to gain any value from the company. First, assets would be handed out to all other creditors and its highly unlikely that even all of them would get there value back unless they had some really strongly backed security collateral. So basically without the buyout they would lose all of their money, with the buyout they get a few bucks. Both situations are bad, but in no way is the sale worse for the shareholders.
    • webyatri, on 04/02/2008, -5/+38 'and is taking billions of dollars worth of mortgage-backed securities owned by Bear as collateral'.
      Worthless (0 value) mortgage-backed securities which cannot be sold for free in todays market or in the near or far future.
      If you kill 1 you are murderer, if you kill 21 you are a hero(some saying somewhere).
      If you lose 10,000 dollars in the market you are a loser. If you lose 100 billion dollars in the market you get a bail out from the fed.(Saying on Wall Street )


      • rmxz, on 04/02/2008, -0/+4Yeah. There was an old saying "owe a bank a million dollars and the bank has a lot of power over you; owe a bank a billion dollars and you have a lot of power over the bank". Guess you multiple it by 100 when talking about the Fed.
      • mikemil828, on 04/02/2008, -3/+1So what, it's not like all that cash is backed by anything, it's not like the fed couldn't have the treasury print up 29 billion more dollars should this fall through, that what you anti-fed diggers always say they would do, right? RIGHT?

        Ah using anti-fed digger's own logic against them is oddly satisfying
        • Parliament, on 04/03/2008, -0/+0Im totally pro-Fed but you sir are a moron. The last thing the Fed would do is print up 29 billion dollars because all that would cause is inflation, which is one of the things they attempt to keep in balance.
    • unleasheduncle, on 04/02/2008, -10/+6THANK YOU!!!!!!
    • ArachnidDude, on 04/02/2008, -2/+21It's not stupid to believe that bad business should lead to failure. There's a reason banks didn't previously have access to fed funds, because those are the funds used to protect the funds of common people. Tapping the fed for big banks is akin to robbing social security, transportation funding, etc..
      Economic consequences of bad business are to be ridden out by all of us, not patched by the gov. I you believe the gov is responsible for stabilizing the economy at all costs, we may as well be socialist now. Sterns should have crumbled. Big wigs should have lost billions. New Investment would slowly bring us back. And maybe, just maybe, we would see the rampant, severely understated inflation of late slow down a bit.
      Now everyone will continue to live in a dream world, because our flat broke government is loaning money it doesn't have.
      • mikemil828, on 04/02/2008, -1/+4//There's a reason banks didn't previously have access to fed funds,//
        Banks ALWAYS had access to fed funds, The Fed is the 'Bank of Last Resort', if no other bank is willing to loan to a desperate bank, than the Fed will, however the consequences of such a loan meant most banks would avoid doing so unless they are in a similar situation that Bear Sterns is in now.

        //Economic consequences of bad business are to be ridden out by all of us, not patched by the gov//
        For the most part this is exactly what happens, for every company that gets bailed out, probably 10,000 die without government intervention. However our government generally will not risk a major international crisis over an economic ideal, this is why we didn't start an nuclear war with the Soviets.

        //If you believe the gov is responsible for stabilizing the economy at all costs, we may as well be socialist now.//
        Well I wouldn't say that America is as socialist as Europe is, but its definitely not laissez-faire capitalist as it used to be, the depression changed all that, during that time we decided that the risk that American's would be forced to eat their pets in order to survive due to failed economic policy isn't worth it.
    • legendxx, on 04/02/2008, -12/+2LOL yeah these people are hilarious. Diggers can be the biggest sheep of them all - "Someone is bashing the government? Before even thinking or doing any kind of research.. Where can I join up!!!?"
    • gotamd, on 04/02/2008, -5/+31You just called a lot of economics professors at the University of Chicago "***** dumb". I just thought I'd let you know ;) Anyway, using the mortgage-backed SIVs as collateral basically means the Fed has no leverage against JP Morgan if it decides not to pay. The value of those securities is on paper and isn't taking into account the reasons why this all happened in the first place--they aren't paying. Yes, the consequences of a meltdown at Bear Stearns would be bad, but the cure is sometimes worse than the disease.
      • unleasheduncle, on 04/02/2008, -1/+2Sometimes. Just not this time.
      • villageatheist, on 04/02/2008, -2/+3milton friedman was an *****
      • mikemil828, on 04/02/2008, -0/+3//You just called a lot of economics professors at the University of Chicago "***** dumb".//
        So what? Diggers commonly call the battalion of Ph'Ds popularly known as the fed retards almost every other day. Why merely call this guy out?
        • eFiniTi, on 04/02/2008, -2/+1Its not about being dumb, smart, good, or bad. Its about self interest. This deals reflects the interest of those effected by Bear Sterns, not the normal joe schmoes like me. You could argue that I am effected by the bank's insolvency, but I would disagree. I don't keep lots of money tied to any single bank, I keep a normal job, and I watch my investments. So this deal effects people like me in the worse by leading to an inflated dollar and having the price of goods around the dollar jump up.

          Robbing from a minority for the "good of all" is still robbery.
      • moush, on 04/02/2008, -0/+1Do you always puppet professors or can you think for yourself?
    • an0nymous, on 04/02/2008, -1/+14Ahem!
      In answer to this question, Fromer attached a March 17 letter from Treasury Secretary Henry Paulson to Federal Reserve Bank of New York President Tim Geithner. In this letter, Paulson said the NY Fed is loaning JPMorgan $29 billion for the buyout, and is taking billions of dollars worth of mortgage-backed securities owned by Bear as collateral.

      Paulson acknowledged that this transaction could lead to losses at the NY Fed if those securities lose value, and agreed that in turn, this 'may reduce the net earnings transferred by the FRBNY to the Treasury general fund.'

      Loan my ass. They are buying worthless securities with fed money. JP defaults, we collect the securities, they're worthless. I'm calling it now.
      • mikemil828, on 04/02/2008, -0/+1//Loan my ass. They are buying worthless securities with fed money.//

        Which according to digg is similarly worthless, fiat currency remember? The Fed can have the Treasury print up more anytime they like, remember?
    • seastead, on 04/02/2008, -6/+6gotamd: when you wrote this did you have any real understanding of the nature of those mortgage backed assets you're talking about? Most are AAA & Commercial, i.e. stable & definitely not worthless. Sadly, for Bear, no mortgage backed assets, even very safe ones, qualified as loan collateral until the Fed changed the rules last week. Bear was the victim of bad management, nasty rumors and a 17B coordinated run on the bank by hedge funds one day. As for your professors, you know what they say about those who can't ;)
      ArachnidDude: Do you really think Bear would have gone down like a controlled building implosion, not touching every bank out there? The problem was big enough to mushroom and threaten every bank, investment & commercial alike. So before you start complaining about the big wigs getting bailed out (seriously - ***** them, it wasn't about them), stop to think for a minute what would happen to the world economy if the US banking system went under one day. The real problem here is that a sad, poorly run investment bank can seriously threaten the entire US economy. That needs looking into.
      • ArachnidDude, on 04/02/2008, -1/+2I don't dismiss the severity of the problem, but I don't think the US banking system would, or even could 'go under' in one day. Without letting the market correct itself, we have simply given an extension to bad and dangerous banking practices. You say 'economy' as if it's a monilith. It's not. Certain sectors would be hurtin for certain. So what. I would like to hear the lesson on how the majority of people would suffer if the banking industry bombed. In case you haven't noticed, we're a liability side economy, and the simple FDIC rules of today would protect most from a catastrophic end. What I'm saying is, as this corrects itself, give the FED funds (our money) to us, as intended if need be, not to banks who caused the problem in the first place.
      • mrraven200, on 04/02/2008, -0/+1Making money freely available and expanding the money supply above g the productive capacity of the society is just high class counterfeiting (printing worthless money). Small time petty thief counterfitters go to prison, these guys get bailed out what gives? Can you imagine the reaction if the counterfeiter were to say not only don't throw me in jail but give me a loan to make up for the value of my counterfeit bills or the economy will collapse. Supper rich = -criminals immune from prosecution IMO.
    • jroll8481, on 04/02/2008, -0/+5As stated in other post in response to you, this loan is back by mortgage securities, the same securities that have cause Bear Sterns to be in this situation to begin with. Did you not read the whole article??

      Second what most people do and should have a problem with is that the Federal Banks are quick to give a hand out to their fellow banks that make bad decisions, handing them money that is just going to go in shareholders and high level executives pockets. Meanwhile those that are losing their homes because of these bad mortgages are receiving no assistance at all. For alot less money they could come up with some type of relief plan that could help to stabalize the housing market so that these companies whose majority assets are tied to the housing market would then have no need for a bail out. Throwing money at the problem like this is the same as scooping water our of a boat that has a hole in it. Yeah it will keep you afloat for a while but if you dont actually plug the hole but eventually you will still sink.

      On another point that bothers me. Why did JP Morgan need assistance in buying Bear Sterns out anyway, when they first received the help they were going to buy the stock at $2 a share, then they came out a few days later planning to buy it at $10 a share. $8 a share when you are dealing with billions of shares is a lot of money. If they could just so easily make that decision, then either they never needed the Fed help to begin with or they were taking a good portion of that $29 billion and putting it in their pockets.
    • MrCobaltBlue, on 04/02/2008, -5/+18I heard saying "*****" every other word really makes a solid argument.
    • rblancarte, on 04/02/2008, -4/+4Most people don't seem to understand the whole loan/collateral thing going on here.
      Loan != Charity
      Collateral != paying back the loan
    • elpresidente408, on 04/02/2008, -3/+5I hate when people call this a "bail out". No it's not. It is not a bail out when you value a stock at $2/share down from the $100+ it was previously trading at. Hell the $2/share was less than the value of the corporate office building alone. The point of this was to prevent similar runs from happening to other banks that Monday morning.

      To all the BSC shareholders who are crying about their loss, be thankful you got at least $2/share or $10/share, had the fed done nothing and Stearns gone bankrupt, you would've been at $0/share
      • loggia, on 04/02/2008, -0/+2Yes, it is a bail out when the stock is at $2/share. The stock price makes no difference. They are being lent $29 billion that will never be repaid.

        That's a bailout.

        I think you're confusing the issue of whether or not there is a "moral hazard." That is, why would businesses take due care if they know they are going to be bailed out? Well, most of the people getting burned are the regular shareholders - which is what always happens. The executives at Bear Steans are all still quite rich, even with the stock price having fallen to $2. And by the way, JP Morgan is now offering $10.

    • tarm, on 04/02/2008, -7/+4You dumb *****. As anonymous pointed out the US TREASURY just said they would use our tax money to make up any losses that the FED experiences from this deal. The power of the government purse has just been handed to a private organization.

      I really hope you get raped by a goat and thrown off a building into a ginormous pile of *****. In that order.
    • cobbwobbles, on 04/02/2008, -3/+8Dude you're a fool, where have you been the last ten months, those mortgaged backed securities aren't worth jack ***** because the home owners DEFAULTED ON THEIR LOANS MORON.
    • seastead, on 04/02/2008, -6/+3Does anyone here understand what MORTGAGE BACKED means?...there are plenty of perfectly solid mortgages out there with AAA ratings, which if the US banks don't go out of business causing a subsequent collapse of the US economy will probably be repaid. The Fed (you and me) didn't bail out Bear, they bailed out all the other banks that would have fallen, many of which are FDIC insured. The Fed backed 30B (coincidentally, roughly the same amount that Bear had in high quality mortgage backed assets) to avoid having to pay all the FDIC insured funds at the commercial banks. The Fed took a relatively minor risk (about a half a day worth of Iraq expenditures) to avoid a major catastrophe. If you think average Joe had problems yesterday, just think what headaches would come from a banking collapse. The mismanagement that led to this debacle is the real problem, not the relatively cheap band aid they put on it.
    • 3drage, on 04/02/2008, -1/+2Because we all know that borrowing more money will make everything right with the world.
    • sgglynn, on 04/02/2008, -1/+2'and is taking billions of dollars worth of mortgage-backed securities owned by Bear as collateral'.

      Mortgage-backed securities that are going to fail. Thats like saying they took a pile of dog ***** for collateral on a 10 billion dollar loan. They are giving a loan they know can't be paid back, JUST LIKE BEAR STEARNS. ***** douche puppet.
    • thelelander, on 04/02/2008, -3/+3JP Morgan hasn't taken any money from the fed. The Fed has given them a $29 billion dollar credit card. Unless JP Morgan goes bankrupt the fed will get all of their money back, plus interest. The MBS JP posted as collateral avoids interest payments - if they go kaput they still owe money.

      If the government was actually giving money for a 'bailout' it would have to be passed by congress. The Fed can't just print money and give it out.

      STOP DIGGING THESE RETARDED ARTICLES.
      • tsberts, on 04/02/2008, -0/+1"If the government was actually giving money for a 'bailout' it would have to be passed by congress. The Fed can't just print money and give it out."

        You've hit the nail right on the head. What just happened was clearly unconstitutional. And, sadly, it's just the first step on the road to hell. America is screwed if we don't stop this now.

        It wasn't a loan - not really - it's more like the "Loan" you get from your grandmother, backed up by your baseball cards as collateral. The Treasury has agreed to backstop the deal "IF" the underlying assets fall short. Well, JPM will have to eat the first $1Billion, so at least they've got some skin in the game, right?

        We just got taxed. Those MBS aren't worth 50 cents on