Why Bear Stearns Was Saved

At the New York Times, Dealbook's Andrew Ross Sorkin sees the hand of the Federal Reserve in JPMorgan's sweetheart price for Bear Stearns. Aggressive deal makers on the government's payroll include Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and Tim Geithner, head of the New York Fed.

Sorkin writes: "In case there is any confusion about who was pulling the strings behind the scenes of JPMorgan Chase's acquisition of Bear Stearns, the curtain was lifted Monday. By raising its bid—with the grudging approval of the Fed—to $10 a share, from $2, JPMorgan exposed what had long been whispered about but no one dared to say aloud: the Fed is officially in the deal-making business."

Good stuff on the Fed's responsibility and the always intriguing relationship between Wall Street and Washington. You can read the whole thing here.

And at Forbes, Robert Lenzner reminds us why the Bear bailout needed to happen, noting that "the core of Wall Street's stability is the counterparty risk in the marketplace." Bear had a hand in a whopping $10 trillion worth of transactions, by some estimates.

Lastly, in case you missed it, the headline of James Surowiecki's financial page speaks volumes: "Too Dumb to Fail."