Topic: DOJ and NY AG team up to sue JP Morgan

[Pandora]

JP Morgan finds itself under the government microscope for having heartlessly... cooperated with the government four years ago

... One notable detail: J.P. Morgan didn't sell the securities. The seller was Bear Stearns—yes, the same Bear Stearns that the government persuaded Morgan to buy in 2008. And, yes, the same government that is now participating in the lawsuit against Morgan to answer for stuff Bear did before the government got Morgan to buy it....

    As for the federal government's role, it's helpful to recall some recent history: In the mid-2000s, Bear Stearns became—outside of Fannie Mae and Freddie Mac—perhaps the most reckless financial firm in the housing market. Bear was the smallest of the major Wall Street investment banks. But instead of allowing market punishment for Bear and its creditors when it was headed to bankruptcy, the feds decided the country could not survive a Bear failure. So they orchestrated a sale to J.P. Morgan and provided $29 billion in taxpayer financing to make it happen.

    The principal author of the Bear deal was Timothy Geithner, who was then the president of the Federal Reserve Bank of New York and is now the Secretary of the Treasury. Until this week, we didn't think the Bear intervention could look any worse.

Somewhere there was a legal department fail here - I can't ever, ever imagine buying a company with Bear's reputation that was sinking into bankruptcy without doing either via an asset sale or letting the mess wash through Chapter 7 so there could be an old bank / new bank split.  But Bank of America made exactly the same mistake at roughly the same time with Countrywide, so it must have appeared at the time that the government largess here (or the government pressure) was too much to ignore.

What the hell are the Feds up to now with this?

[Predator Don]

When you sleep with dogs you get fleas.

[AlanS]

When you sleep with dogs you get fleas.

I was thinking prostitutes and crabs.

[Libertas]

I'm thinking theater of the absurd, this smells like politicians covering their asses, period.  There ought to be bastards in Congress and the Obama Administration hauled before Committees, but then there would be nobody to run or sit on the Committees, so they'll go after the company they were all in bed with.  That's the DC two-step for ya.