HowardWas the Bear Stearns Deal a Government Bail Out?
Real Crash- Looking at the Financial System and the War Drive:
Goldfinger, He loves only gold.
Somebody robbed the Danville Train.
And got away, so I'm told.
They took out those smoking six shooters,
And made off, with the gold.
(Variation/Spoof, folk song)
Yes, they did bail out Bear Stearns. It was done through the Federal Reserve of the USA. This was a bailout and also probably a violation of Money Laundering statues. It was laundered. (By the way this is an interesting angle to the situation, now that you bring it up.)
It's a simple trick. The Federal Reserve accepts $30 billion dollars of "securities" at face value. Yet on the market now they would be worth, perhaps not 1-cent on the dollar, but a lot less. This is how bail outs are run, illegally. You buy the paper and say it is worth "x". As for President Bush, in this case, he read the speech, congratulating Chase on their "purchase," he certainly didn't write it.
As Former Federal Reserve Chairman Paul Volcker said, quoted in the L.A. Times, if they want to do that (bail out Bear) fine, but that has to be approved by the US Treasury, and done through the Treasury, the President, and the Congress. That cannot be run through the Fed Reserve. The Fed is overstepping their powers. See the link above.
Volcker calls the Bear Stearns bailout "a new departure." And of course Lyndon LaRouche has been clear on this for a long time, see his Ninth Forecast (link). Volcker represents someone with more institutional background, saying much of the same thing.
Here is an excerpt of the L.A. Times article, quotes from Paul Volcker:
In other words, rescuing companies other than banks, and guaranteeing bad loans, is a job for Congress and the White House. You want to bail out Carlyle Capital, or Chrysler or K-Mart? Go ahead, knock yourself out. Just don't ask the Fed to do it, because it's not their job.
Of course, potentially catastrophic failure was imminent and the Fed evidently felt it couldn't wait. Volcker: "... They stepped into a vacuum, and I think quite appropriately, itÃÂs a judgment they had to make. But is this what you want for the longstanding regulatory support system? My answer is no."
