Socialism for the rich
If you happen to be one the poor working stiffs who finds themselves unable to pay their mortgage or gets behind on their credit card payments, the message is that you're a lazy. slothful, ignorant moron who should be forced to pay for your bad decisions.
If, one the other hand, you happen to be one of those who were making billions off of making all of these bad loans and poor credit choices, the government will be happy to give you billions more in taxpayer dollars to keep you afloat.
JPMorgan Chase & Co (JPM.N) and the Federal Reserve Bank of New York on Friday agreed to provide emergency financing to Bear Stearns (BSC.N) after the investment bank said its cash position had deteriorated sharply, sending its shares into freefall.
. . .
The Fed, through its discount window, will provide non-recourse, back-to-back financing to JPMorgan Chase, the commercial bank said. JPMorgan said it does not believe this transaction exposes its shareholders to any material risk.
JPMorgan is at least right about that last part.
If you are wondering WTF a non-recourse, back-to-back financing is, pull up a chair:
JPM gets to go the the Discount Window and borrow all the greenbacks they want; Then they loan that to Bear. In the event that Bear defaults, the NY Fed cannot go back to recover from JPM -- hence, non-recourse.
So, JPMorgan shareholders are safe. The taxpayer on the other hand . . .
Corporate Welfare at its finest.
