March 17, 2008

Banking Dossier; Bear Sterns and the Fed

Fed takes "rare path" to aid Bear Stearns
Assocated Press Mar 14, 2008
Editor CE- This story tells you the "FED" is lending billions to a giant stock broker that speculated and lost on the same sham mortgages it sold to others by the billions. Furthermore, the FED gets around its own rule (congress can not enforce it) by allowing a giant bank to act as a risk free front for the broker. Does this not sound like "money laundering?" But more important, no one bothers to ask where the FED gets all these billions it is loaning to banks and brokers in order to make Wall Street look healthy? The answer: you are paying every dime of it; there is no free dinner at the time-sharing pitch. Pharisee Watch is working on an explanation designed for your12-year old kids because they are the ones who will have to pay back this debt. "Senior Federal Reserve staffers said the arrangement allows JP Morgan Chase to borrow from the Fed's discount window and put up collateral from Bear Stearns to back up the loans. JP Morgan, a bank, has access to the discount window to obtain direct loans from the Fed, but Bear Stearns, an investment house, does not.... While JP Morgan is serving as a conduit for the loans, the Fed and not JP Morgan will bear the risk if the loans are not repaid, officials said.

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