Hold your Noses, Here Comes the Fed Again!

The J.P Morgan Chase buyout of Bear Stearns stinks to high Heaven .... here's why!

• The Fed says that Bear Stearns (BS) was headed for bankruptcy. How strange that Bear's officers and directors received billions of dollars in bonuses just before the sale to J.P. Morgan (JPM) ... what's that strange smell?
• Then the Fed announces that they were going to open the discount window to Goldman, Lehman, Morgan and others. But guess what? Nobody at the Fed bothered t0 tell BS ... that strange smell is getting stronger!
• If BS was about to get vaporized, why didn't the Fed offer the $30 million dollars directly to BS as opposed to backing JPM's purchase of BS for a pittance? The straight answer is that the Fed wanted BS to go down! .... that strange smell is now becoming overpowering.
• New York Stock Exchange rules supposedly prevent any one from buying more than 20% of a company without a shareholder vote. JPM bought 39.5% of BS without bothering to talk to the shareholders ... now that strange smell has become a stench which is wafting towards the Heavens.
• The Fed overstepped its legal boundaries .... what else is new! It did not provide liquidity to the banking system, but rather, it went far beyond that by putting up a $30 billion dollar non recourse loan to JPM to ensure the solvency of a non-bank entity. Bear Stearns is not a bank. It's an investment (excuse me while I guffaw) bank.... the stench is almost at the Pearly Gates.
• FYI...FYI...FYI...FYI... J.P. Morgan is the Federal Reserves largest SHAREHOLDER!!!! Oh my, you don't think that there could be any connection here do you?
• As I have documented in my previous posts, the Fed is neither Federal nor a Reserve ... it is in fact the biggest scam of all time! .... now their stench has definately risen higher than Heaven itself.

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.