Fed paid top dollar for junk assets

You better sit down for this, because its going to shock you.
The Federal Reserve overpaid for the assets they bought from Wall Street.

Federal Reserve Chairman Ben S. Bernanke and then-New York Fed President Timothy Geithner told senators on April 3, 2008, that the tens of billions of dollars in “assets” the government agreed to purchase in the rescue of Bear Stearns Cos. were “investment-grade.” They didn’t share everything the Fed knew about the money.
The so-called assets included collateralized debt obligations and mortgage-backed bonds with names like HG-Coll Ltd. 2007-1A that were so distressed, more than $40 million already had been reduced to less than investment-grade by the time the central bankers testified. The government also became the owner of $16 billion of credit-default swaps, and taxpayers wound up guaranteeing high-yield, high-risk junk bonds.
By using its balance sheet to protect an investment bank against failure, the Fed took on the most credit risk in its 96- year history and increased the chance that Americans would be on the hook for billions of dollars as the central bank began insuring Wall Street firms against collapse.

Were you as shocked as I was? No. Well, I don't think anyone was really all that surprised.

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wow! really? How could Bernanke be so hoodwinked?

What a surprise! I'm shocked! The fed bought something at full value that isn't worth the bits it was transferred on? Gee, poor Fed.

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Poor Fed - Poorer You - Richer Cassano - Richest Greenberg

Cassano was hired by Greenberg with full knowledge of what he did to Drexell Burnham Lambert in 1989 in financing the RJR takeover with junk bonds. Greenberg was hiring a known quantity. His senior staff in New York warned him not to hire Cassano and not especially not to make the London operations as loose as it was with Cassano in change.

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Burton Leed