
The Federal Reserve was forced to rescue Bear Stearns last month because the firm was within hours of bankruptcy and its failure could have led to a ''chaotic'' time in the American economy, Fed boss Ben Bernanke told lawmakers on Wednesday.
After an uproar over the terms of the sale, the share price was boosted to around $10 and JP Morgan agreed to assume the risks for the first $1 billion in losses that might occur, lowering the Fed's potential risk to the remaining $29 billion in securities.
For the first time, Bernanke acknowledged the U.S. could reel into recession from the powerful punches of housing, credit and financial crises. Yet, he was coy about the Fed's next move.
We should not be bailing the businesses out or people who are losing there homes period.
Another very expensive bailout--for an investment firm? United Corporations of America strikes again.
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