Lehman is down 12 percent and still falling. Watch them.

It seems that the keystone-kop Fed has tried the same “bandaid on the jugular” with BSC that it did with Countrywide. JPM threw a 28-day lifeline to Bear, guaranteed by the Fed, much as the Fed (allegedly) got Bank of America to stake Countrywide when it was blowing up.

Of course, for good measure, Bernanke pulled another “getting back at the bears” stunt. The first “tape bomb” was simply that Bear had gotten “financing” from JPM. That sounded like a huge piece of good news and forced BSC short sellers to dump their positions. BSC soared 10% in pre-market trading. Then the second piece of information hit the wires and BSC collapsed 50 percent. JPM probably made more money stealing all those short positions than it “risked” in supporting Bear.

As usual, the Fed screwed over the smaller traders who did real research, and made the right calls, in favor of the politically-connected institutions.

In gold we trust.

By E. Chartman of Neoconservative

BusinessWeek writes "The market continued to hammer Bear Stearns Cos. on Thursday as concerns about the bank's solvency rattled its shares. Whispers that the New York-based bank is in trouble dragged the company's stock to its cheapest price since just after the September 11th terrorist attacks."

Accoreding to Reuters report " JPMorgan Chase & Co and the Federal Reserve Bank of New York agreed to provide financing to Bear Stearns, the fifth-largest U.S. investment bank for up to 28 days. Bear Stearns said the move would allow it to continue normal operations. Bear Stearns shares plummeted as much as 50 percent before retracing some of those losses."