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|Subject: No one is safe from Big Brother||Date: 10/8/2012 5:42 PM|
|Author: fleg9bo||Number: 647726 of 748838|
The U.S. Department of Justice and NY Attorney General Eric Schneiderman teamed up last week to sue J.P. Morgan in a headline-grabbing case alleging the fraudulent sale of mortgage-backed securities.
One notable detail: J.P. Morgan didn't sell the securities. The seller was Bear Stearns — yes, the same Bear Stearns that the government persuaded Morgan to buy in 2008. And, yes, the same government that is now participating in the lawsuit against Morgan to answer for stuff Bear did before the government got Morgan to buy it....
In the mid-2000s, Bear Stearns became — outside of Fannie Mae and Freddie Mac — perhaps the most reckless financial firm in the housing market. Bear was the smallest of the major Wall Street investment banks. But instead of allowing market punishment for Bear and its creditors when it was headed to bankruptcy, the feds decided the country could not survive a Bear failure. So they orchestrated a sale to J.P. Morgan and provided $29 billion in taxpayer financing to make it happen.
The principal author of the Bear deal was Timothy Geithner, who was then the president of the Federal Reserve Bank of New York. Until this week, we didn't think the Bear intervention could look any worse.
JPM did the government a big favor by buying Bear Stearns and is now being thrown under the bus for it. This has "Obama" written all over it.
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