Bear Stearns Bailout "Worst Fed Mistake in a Generation"

Monday, April 28, 2008 | 05:00 PM

Here's a glimpse at what must have been a fascinating discussion:

"The Federal Reserve's moves to prop up Bear Stearns Cos. will come to be seen as "the worst policy mistake in a generation," the Fed's past head of monetary affairs said. The action is comparable to "the great contraction" of the 1930s and "the great inflation" of the 1970s, said Vincent Reinhart, a scholar at the American Enterprise Institute, who retired from the Fed last fall.

Mr. Reinhart's assessment, delivered at a panel discussion at the institute Monday, is one of the harshest appraisals yet by a high-profile observer of the Fed's decision in mid-March to lend money to Bear both as temporary funding to make a merger possible, and then to finance $29 billion of Bear's assets to make its takeover by J.P. Morgan Chase & Co. possible."

I'd love to get a recording or transcript of the speech. Any one have access?


>

Source:
Ex-Fed Official Declares Bear Deal Worst Mistake in a Generation
GREG IP
April 28, 2008 4:10 p.m.
http://online.wsj.com/article/SB120941300416350473.html


Monday, April 28, 2008 | 05:00 PM | Permalink | Comments (27) | TrackBack (0)
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BR---
Will we be seeing an IBank welfare line soon?

Posted by: soNotInTheKnow | Apr 28, 2008 5:02:52 PM

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