The Fed in Hot Water
The Fed has finally came clean. It now admits it bailed out Bear Stearns - taking on tens of billions of dollars of the bank's bad loans - in order to smooth Bear Stearns' takeover by JPMorgan Chase. The secret Fed bailout came months before Congress authorized the government to spend up to $700 billion of taxpayer dollars bailing out the banks, even months before Lehman Brothers collapsed. The Fed also took on billions of dollars worth of AIG securities, also before the official government-sanctioned bailout.