Fed's Bear Stearns 'loan' faces scrutiny

http://www.msnbc.msn.com/id/23828287/

more BS news

Bear Stearns Chairman Cayne Sells His Entire Stake Prior to Vote on Buyout

http://www.bloomberg...6...&refer=home

http://www.msnbc.msn.com/id/23828287/

What the Fed is calling a $29 billion "loan" to help finance JPMorgan Chase's purchase of Bear Stearns looks much more like a $29 billion investment in securities owned by Bear. Although the Fed insists that it isn't technically buying any assets, in practical terms it's doing exactly that.

Vincent R. Reinhart, a former director of the Fed's Division of Monetary Affairs and now a resident scholar at the American Enterprise Institute, said in an interview Wednesday: "The New York Fed is the residual claimant. That doesn't look to me like a loan. That looks like equity."

DUH!!!

It took them three days to figure that out?
I doubt that completely.
Bernanke knew what he was doing when he did it.

The next one is comiiing...

what kind of discount did they put on that collateral - I mean is 30B buying 300B of RE loans or what? TIA

BSC's MBS portfolio is (was) worth around $30B, so the Fed is not involved in a leveraged buy out They were estimated to be worth around $43-47B last Nov, I believe...