Professor Elam

It is hard to see how J P Morgan can lose on this deal.   They put up a fraction of the financing, the FED guarantees the deal, and Blackrock does the work.  As Jim Rogers observed, the Bear partners keep their bonuses and their Maseratis, we get their losses.  Now you and I own the Bear Stearns portfolio. But where is my Maserati?

My point is that the FED has given the OK to such brazen risk taking by rescuing the bad paper.  But the partners at Bear keep their bonuses paid in January for getting us into this mess. A bankruptcy by Bear would have required Parters to put that money back in the pot so to speak.  As it is, they got the gold we taxpayers got the shaft, to paraphrase Jerry Reed.