Month: May 2020

It was a fantastic deal–for Jamie Dimon. The Fed had left Bear no negotiating power. “Buying a house,” Dimon told Congress, “is not the same as buying a house on fire.”

“The impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained,” Bernanke calmly assured congress. “In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”

In the Eleventh District, disciplined banking roots run deep. In 1932, when the Fed started providing loans to bankrupt financial institutions, the Dallas bank warned: “Credit is exactly like morphine. Either credit or morphine used habitually leads inevitably to the gutter.”