Some News about Goldman Sachs, Morgan Stanley, Bear Stearns and J.P. Morgan Chase

In February 2008 Goldman Sachs, Morgan Stanley and Bear Stearns were under investigation by the FBI and the SEC, as well as by the states of New York and Connecticut in the default of mortgage-backed bonds.

They are looking for criminal activity and insider trading in the packaging of subprime loans as securities.

Meanwhile the rumor persists on Wall Street and in Frankfurt, London and Paris that J.P. Morgan Chase has a $4Billion dollar loss on a derivatives trade coming very soon.

Now J.P Morgan Chase pays $2 a share ($270 million) to buy all of Bear Stearns - less than one-tenth the firm's market price on Friday. Only a year ago, Bear's shares sold for $170. The sale price includes Bear Stearn's soaring Madison Avenue headquarters.

The deal for Bear was done at the behest of the Fed and Treasury Department with the Fed approving a $30 billion credit line to help J.P. Morgan do the deal for the troubled firm, which was driven to the brink of bankruptcy by what amounted to a run on the bank.

Isn't it interesting that the Fed, which is a privately owned corporation (see my series: The Federal Reserve is neither Federal nor a Reserve. It is one of the Greatest Scams of Alltime!) was created by 7 men in 1910 at a highly secret meeting on Jekyll Island. Two of these men were; Henry Davison, senior partner of J.P. Morgan Company and Benjamin Strong, head of J.P. Morgan's Banker's Trust who 3 years later became the first head of the Federal Reserve System.