Ben Bernanke admits Bear Stearns was hours from collapse

Times of London ^ | 04/03/08 | Dearbail Jordan

[Petronski]

I’m aware of the context.

[Petronski]

I’m doing just fine.

[irish guard]

The fed opened the discount window to investment banks AFTER the JPMorgan deal to buy Bear. As for why JPM was asked to buy Bear, it was the only bank big enough and solvent enough to handle the deal.

As for Dimon's bank being exposed as a clearing entity and responding zero, The two can be mutually exclusive

"J.P. Morgan CEO James Dimon said his firm may have been the only institution in a position to help Bear Stearns and stop a potential chain reaction among other investment banks.

“Bear Stearns would have failed without this effort, and the consequences could have been disastrous,” Mr. Dimon told the committee in remarks prepared for delivery. “The idea that the Bear Stearns fallout would have been limited to a few Wall Street firms just isn’t so.”

He said J.P. Morgan couldn’t and wouldn’t have entered the transaction without the Fed’s backstop, but that it was the firm’s obligation as a “responsible corporate citizen” to help stem potential systemic risk if it could.

Mr. Dimon also took issue with the notion that the Fed has taken responsibility for Bear Stearns’ riskiest assets.

“We did not cherry pick the assets in the collateral pool,” Mr. Dimon said. “The assets taken by the Fed consist entirely of loans that are current and domestic securities rated investment grade.”

[Toddsterpatriot]

Hey, why don't you tell us again that Jamie Dimon’s opinion under oath was worse than the multi-million dollar frauds perpetrated by the officers of Enron?

[Admin Moderator]

Stop the personal attacks and the name-calling immediately.

[Petronski]

I want to state on the record for the benefit of those who do not know: I pressed the abuse button.

[null and void]

Thanks for letting us know.

You didn’t need to own up to it, doing so was a class act.

[groanup]

My computers have been down all afternoon. Wow, someone really got p.o.’ed. Sorry I missed all the excitement. Thanks for dinging the perpetrators and also for being honest enough to own up to it.

[RSmithOpt]

Well, the recent collapse in the housing market due to BS sub-primes and allowable over-leveraging by the brokers and the banks, plus the drain on the taxpayers' dollars from illegal immigration is directly the faults of W and Congress and the feds.

Without a doubt, W will get the blame.

[RSmithOpt]

Excellent post on #223. That is exactly has happened to the banking industry. Banking and brokerage and mortgage and real estate firms firms should have never been allowed to be ‘the same’ corporation.

[Toddsterpatriot]

Banking and brokerage and mortgage and real estate firms firms should have never been allowed to be ‘the same’ corporation.

Countrywide was never a brokerage firm, Bear Stearns was never a mortgage firm. They managed to screw things up just fine.

[M. Espinola]

Very telling dollar chart. Thanks for posting the data.