Excerpt from NYT editorializing on the Bear Stearns-JP Morgan-Fed bailout deal.


". Bear Stearns isn't enormous. It doesn't take deposits from the public. Yet the Fed believed that letting it implode could unleash a domino effect among other banks, and the Fed provided a $30 billion guarantee for JPMorgan to snap it up.

Compared to the cold shoulder given to struggling homeowners, the cash and attention lavished by the government on the nation's financial titans provides telling insight into the priorities of the Bush administration. It's not simply a matter of fairness, though. The Fed is probably right to be doing all it can think of to avoid worse damage than the economy is already suffering. But if the objective is to encourage prudent banking and keep Wall Street's wizards from periodically driving financial markets over the cliff, it is imperative to devise a remuneration system for bankers that puts more of their skin in the game."


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