Fight Back! News

News and Views from the People's Struggle


By Adam Price

Federal Reserve Uses Emergency Powers from the Great Depression of the 1930s

San José, CA – On Friday, March 14, the fifth largest investment bank in the United States, Bear Stearns, failed. Over the weekend the Federal Reserve took over the riskiest mortgage-related investments worth $30 billion and arranged for J.P. Morgan Chase, the third largest U.S. bank (after Citigroup and Bank of America), to buy the rest of Bear Stearns for $2 a share, or 4% of its price on Thursday. The failure of Bear Stearns brings the growing financial crisis full circle, as it was the failure of two Bear Stearns hedge funds that invested in home mortgages that marked the beginning of the crisis last August.