So, by now, the Bear Stearns story is positively old news--I mean, that was four or five days ago, at least, right? Still, there are aspects that I think most people might be missing. First, let's review:



According to a March 14, 2008 http://AP.org/ article from http://Biz.Yahoo.com/ (here: http://biz.yahoo.com/…risis.html ): "The Federal Reserve invoked a rarely used Depression-era procedure Friday to bolster troubled Bear Stearns Cos. and said it will provide even more help to combat a serious credit crisis.



...



The plan announced Friday will supply secured funding to Bear Stearns for an initial period of 28 days, seeking to provide short-term relief for Bear Stearns.



Senior Federal Reserve staffers said the arrangement allows JP Morgan Chase to borrow from the Fed's discount window and put up collateral from Bear Stearns to back up the loans. JP Morgan, a bank, has access to the discount window to obtain direct loans from the Fed, but Bear Stearns, an investment house, does not.



While JP Morgan is serving as a conduit for the loans, the Fed and not JP Morgan will bear the risk if the loans are not repaid, officials said."



Of course, if it looks, to you, like the 5th largest bank in the nation is getting preferential treatment, you're not alone. In Tuesday's edition of Democracy Now (here: http://www.democracynow.org/…/headlines ) Amy Goodman reported: "The Federal Reserve’s decision to bail out the investment bank Bear Stearns is coming under criticism from housing advocates who say the Bush administration has done too little to help homeowners facing foreclosure.



...





Jim Carr of the National Community Reinvestment Coalition said, "It's almost stunning to witness the shoring up of a major financial institution, but not addressing the problem that the quality of housing assets is deteriorating with each minute we wait."



On Monday, reporters questioned White House Press Secretary Dana Perino about the bailout.



Reporter: "But people who are facing, say, foreclosures, individuals, the little guys who are facing their foreclosure, are looking at the big guys getting government, if not brokered, certainly they're overseeing deals that are engineered to sort of keep the big picture financial community afloat, and they're saying, well, where's my boost of liquidity?"



Dana Perino: "They're going to get that boost of liquidity in the form of a stimulus package and a tax rebate that's coming to them the second week of May."



Reporter: "But that’s not going to save their houses.""



That reporter has a good point. That check we'll be getting in May won't cover rent for my apartment and will, in all likelihood, either go in my Japan fund or go towards a new iPhone. Neither are going to help get the US economy back on track and only the former will help my own personal economy. Of course, that's part of why I want to go to Japan. While their economy is tied to the US dollar, they're still doing better than us and their standard of living is higher.



Regardless, the Fed and JPMorgan saving Bear Stearns from it's fate seems pretty unfair to me. Of course, if I go bankrupt, I'm not likely to take an entire economy with me--that said, is a system where one bank's failure can destroy everything a system worth trusting? Especially considering the very next story Democracy Now reported on back on Tuesday:



"Concern is also growing that other investment banks could face possible collapse. On Monday, shares in Lehman Brothers plunged 20 percent, its biggest-ever one-day fall. The Federal Reserve has reportedly urged other leading financial institutions to support Lehman Brothers in order to prevent a further economic crisis.



Market analyst James Hughes: "What the fears are, that the other banks which maybe haven't written down so much, the fear is that they're hiding these subprime mortgage issues, and maybe 'hiding' is the wrong word, but they're putting them somewhere else, so we don't necessarily get the whole picture. But, unfortunately, these things will come out, and that is the fear, that there's going to be yet more writedowns and more problems coming along. And, of course, Bear Sterns is now turning into the US's Northern Rock at the moment, and of course the fears are that there's more going to go that way.""



When that guy says "Northern Rock" he's referring to a UK bank that had to get bailed out earlier this year.



Meanwhile, http://money.cnn.com/ is reporting (here: http://money.cnn.com/…/index.htm) that:



"Stocks jumped Tuesday, with the Dow surging 420 points, its fourth-biggest one-day point gain ever, after the Federal Reserve cut the fed funds rate by three-quarters of a percentage point, surprising investors looking for a larger cut."



The fact that investors were looking for a larger cut is pretty frightening considering how much the Fed has cut interest rates recently. If the economy is still shaky after all of this gardening, methinks it might be time to look elsewhere for solutions.



But don't YOU go looking for solutions to your own problems--at least, don't go looking for *drastic* solutions because even if they're legal drastic solutions they could get you in trouble. http://USAToday.com/ reported back on March 12, 2008 (here: http://www.usatoday.com/…12.art.htm ) that the government is watching your financial records. Well, they might be, anyway. Here's a cutting from the article:



"Each year, federal agents peek at the financial transactions of millions of Americans — without their knowledge.



The same type of information that raised suspicions about New York Gov. Eliot Spitzer is reviewed every day by authorities to find traces of money laundering, check fraud, identity theft or any crime that may involve a financial institution.



As concerns about fraud and terrorist financing grow, an increasing number of suspicious deposits, withdrawals and money transfers are being reported by banks and others to the federal government. Banks and credit unions as well as currency dealers and stores that cash checks reported a record 17.6 million transactions to the Financial Crimes Enforcement Network in 2006, according to a report from the network, a bureau of the U.S. Treasury Department.



"I don't think Americans understand that their financial transactions are being reported and routinely examined," said Barry Steinhardt of the American Civil Liberties Union.



The Treasury Department's database now contains records of more than 100 million financial transactions going back to at least 1996, said network spokesman Steve Hudak."



This isn't even about the Patriot Act or 911--the government's been doing this for years. According to that article the USG's been at it since the 1970s.



I'm seriously starting to wonder just where our government's priorities are.



I'm also seriously starting to wonder where our country's principles are. Then again, it's been a hobby of mine for years: http://thepete.gnn.tv/ Wow, check the date on that thing. I haven't changed much in going-on-four years, have I? ^_^
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