It's Happened

The fifth largest U.S. securities firm, Bear Stearns, has failed (Link). OK so it hasn't actually failed (yet) but when the Fed comes in and bails you out because you are considered too big to fail then....? A side note is that the Fed teamed up with JPMorgan to stabilize Bear Stearns and guaranteed JPMorgan against any bad debt which they take on. In other words you and I are now on the hook for a private companies bad decisions and management. On another side note, Bear Stearns' chairman Jimmy Cayne recently closed on a $26 million apartment in NYC (Link). And finally JPMorgan has a history of "saving" the financial system in the USA. In 1907 J.P. Morgan the man literally locked bankers into his parlor until a compromise was agreed upon to save the nation from the Panic of 1907. This single act made possible the wondrous 20th century that the USA enjoyed. For more info about J.P. Morgan the man, I recommend the book "House of Morgan" (Amazon) available at your local library.