On Thursday, Sept. 18, 2008, the astonished leadership of the US Congress was told in a private session by the chairman of the Federal Reserve that the American economy was in grave danger of a complete meltdown within a matter of days. “There was literally a pause in that room where the oxygen left,” says Sen. Christopher Dodd (D-Conn.). As the housing bubble burst and trillions of dollars’ worth of toxic mortgages began to go bad in 2007, fear spread through the massive firms that form the heart of Wall Street. By the spring of 2008, burdened by billions of dollars of bad mortgages, the investment bank Bear Stearns was the subject of rumors that it would soon fail. “Rumors are such that they can just plain put you out of business,” Bear Stearns’ former CEO Alan “Ace” Greenberg tells FRONTLINE. The company’s stock had dropped from $171 to $57 a share, and it was hours from declaring bankruptcy. Federal Reserve Chairman Ben Bernanke acted. “It was clear that this had to be contained. There was no doubt in his mind,” says Bernanke’s colleague, economist Mark Gertler. Bernanke, a former economics professor from Princeton, specialized in studying the Great Depression. “He more than anybody else appreciated what would happen if it got out of control,” Gertler explains. To stabilize the markets, Bernanke engineered a shotgun marriage between Bear Sterns and the commercial bank JPMorgan, with a promise that the federal government would use $30 billion to cover Bear Stearns …
Pt. 2 America’s Bankrupt Banks (Inside the Meltdown)
June 5th, 2010 | Credit
12 comments ↓
@mickeykozzi THANK YOU!!
That is what the Federal reserve was created for if you read history it was created to prevent this type of stuff the problem is they were at falt as well for created this asset bubble in the first place.
You will never be credited for preventing a massive crisis and collapse unless the full effects of an absolute crisis and collapse was felt by everyone. Even though how unpoular this was it was the right thing to do.
the federal reserves role is NOT to save the economy, gosh get a clue
Note how all key people in this drama are “very smart”.
So the FED who is supposed to know the market, made key decisions that guaranteed the demise of the market they were supposed to be saving. Surely that strikes you as odd?
This is some of the most scripted BS I have ever seen. lol
yup good ol’ capitalism it won’t lie!
Shame we don’t use it some day
When we continue to allow big accounts blowing bubbles and black mailing each others in the near future, I don’t see people have a reason to work. You don’t have to mention any glory of your retirement if they can simply ruin any infrastructure like that.
can Iceland and Ireland get our tax dollars back?
wow, geight is sitting saying we don’t have time, this things gonna explode, tommorrow the markets open and its gonna happen all over again. Then there’s me, no economic experience whatsoever. Fuck em, Tim, There a bunch of sluts and they need to be fucked.
9:15 that is retarded! Punish Bear Stearns for what they were doing by rewarding JPM for doing the same. What a propaganda piece this video is to try and make out that the Fed and Treasury did the right thing. BS!!!
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