HMMMMMMMMMMMM... I guess he is right since the $30 BILLION came from taxpayers.... wonder how much more taxpayers money they will front to help the financial crisis.... Bernanke says Fed did not 'bail out' Bear Stearns by Rob Lever 15 minutes ago WASHINGTON, April 2, 2008 (AFP) - Federal Reserve chairman Ben Bernanke said Wednesday the central bank "did not bail out Bear Stearns" but aided a rescue of the Wall Street firm "to preserve the integrity" of the financial system. Bernanke, appearing before the Joint Economic Committee of Congress, said the Fed confronted "difficult questions of public policy" as it faced a potential meltdown of one the largest US investment banks. He said the Fed supported the buyout by JPMorgan Chase to avert a "chaotic" situation that could have triggered broad economic impacts. "We did what we did because we felt it was necessary to preserve the integrity and viability of the American financial system, which in turn is critical for the health of the economy," Bernanke said. The Fed chief was facing his first questions on Capitol Hill since the spectacular meltdown of Bear Stearns that prompted US authorities to step in and support a buyout with loan guarantees by the central bank. "We did not bail out Bear Stearns. Bear Stearns' shareholders took a very significant loss. An 85-year-old company lost its independence and became acquired by another firm," Bernanke said. "I don't think any company is interested in repeating the experience of Bear Stearns." In his prepared remarks, Bernanke said the fact that Bear Stearns was connected to so many parts of the financial system meant that a failure could have meant a calamity. "With financial conditions fragile, the sudden failure of Bear Stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence," Bernanke said. "Given the current exceptional pressures on the global economy and financial system, the damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain. "Moreover, the adverse effects would not have been confined to the financial system but would have been felt broadly in the real economy through its effects on asset values and credit availability." Bernanke said the rescue was organized after Bear Stearns warned the Fed on March 13 "that its liquidity position had significantly deteriorated and that it would have to file for Chapter 11 bankruptcy the next day unless alternative sources of funds became available." He said the Fed, which does not oversee investment firms, did not have advance knowledge of the Bear Stearns crisis. "We were not informed of the imminence of the situation until about 24 hours before the event -- probably on Thursday with the announcement of their information that they were going to be likely in default on Friday morning," he said. "And it was at that time that we began our emergency response." Bernanke acknowledged the rescue was an extraordinary event. "I certainly hope, and do not expect, a repeat of this episode." "Normally, the market sorts out which companies survive and which fail, and that is as it should be," he said. "However, the issues raised here extended well beyond the fate of one company. Our financial system is extremely complex and interconnected, and Bear Stearns participated extensively in a range of critical markets." He said the Fed acted "in close consultation with the Treasury Department," to provide funding to Bear Stearns through JPMorgan Chase. The action was organized, he said, "to prevent a disorderly failure of Bear Stearns and the unpredictable but likely severe consequences of such a failure for market functioning and the broader economy." Bernanke's comments came a day after the Fed formally approved JPMorgan Chase's takeover of Bear Stearns. JPMorgan Chase hiked its offer for Bear Stearns on March 24 to 10 dollars per share, or over one billion dollars, quintupling a fire-sale price agreed a week earlier for the distressed investment bank. The Federal Reserve has pledged 29 billion dollars of taxpayer money to finance the deal in return for 30 billion dollars' worth of Bear Stearns assets, including ailing mortgage-backed securities.