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The government is now officially lining up tax payers to bail out the housing crisis.


The recent move by the Fed to guarantee 30 billion dollars worth of loans to J.P. Morgan for their acquisition of Bear Stearns officially means U.S taxpayers could be liable for bailing out the investment bank.

The government is on a fast track to meet with representatives of the Fed, J.P. Morgan and Bear Stearns to better understand the role of responsibility with the latest development arising from the demise of the credit markets. Many red flags immediately arose when J.P. Morgan announced their acquisition of Bear Stearns for under 250 million dollars just a few weeks back. How could a company that had a market cap of over twenty billion dollars decline in value that fast. Their Manhattan office is supposed to be worth over 1 billion dollars on its own. More concerning about the deal is the role the Fed played in issuing up to 30 billion in loan guarantees to help broker the deal. This squarely puts the fate of the company in the hands of the U.S. tax payer should the company fail in the future. Congress is eager to find out how the deal was put together and why it was rushed through a due diligence process so quickly. It is clear now that the government will be actively involved in bailing out the credit markets, to what extent they bring programs directly aimed at relief for home owners who have seen their home values decline by over 10% in the past twelve months is yet to be determined..

3-27-2008 ? LoanNetwork.com





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