Bill Kristol forgets that fact-checking is important, even in a hit piece.

TPM Reader SW’s lament …

I am appalled, though not surprised, at the complete silence by the candidates on the last few days’ events on Wall Street and the world’s stock, bond and currency markets. This has far more effect on all of our
futures than racist comments by the oxygen deprived brains of some old political or spiritual leaders. I know why Clinton and McCain are not talking about it: too many of their biggest supporters had too much to
do with what happened, and benefited from the deregulation of the past twenty years for which both (and their allies) had a great deal of responsibility. (Remember that Hillary stood by while her colleague
Chick Schumer killed the bill to tax hedge fund managers, who ear scores of millions every year, at income, rather than capital gains, rates.) What about Obama? Is he not up to the task of educating people about
what the repeal of the Glass-Steagall Act did to the markets many Americans poured their retirement and college savings into? Does he know that the Federal Reserve is about to bail out bankers, investors, and
outright thieves who helped drive down the dollar, and brought the credit markets to a near standstill? Does he understand the problem? I wouldn’t know.

Seventy years ago Franklin Roosevelt was able to explain this country’s and the world’s financial crises to a far less educated, and less accessible, American public. That today’s candidates are unwiling, or
unable to do so, is alarming. Maybe if the media first tried to understand the problems, then asked the proper questions until answers were forthcoming or it was clear the candidates are afraid to ask them,
political coverage would be more than the extreme sports coverage it has turned into.

Dean Baker, on the Fed’s forced marriage of Bear Stearns and JPMorgan.

Funny how even five years later no one can quite put their finger on the when, where and how — let alone the who — behind the decision to disband the Iraqi Army. As they say, success has a thousand fathers, but failure is an orphan.

CNBC’s Jim Cramer declaring Bear Stearns to be “FINE!,” during a segment that I understand ran last week:

Jared Bernstein offers a primer on the Bear Stearns meltdown and the government’s bailout.

Lotta Rev. Wright on the Sunday shows this weekend. But nothing quite matched Fox News Sunday’s — dare I say — Jihad against Barack Obama …

High-res version at Veracifier.com.

Sen. David Vitter (R-LA): There’s an “enormous difference” between my use of prostitutes and Eliot Spitzer’s.

Bill Kristol corrects his Obama hit piece.

At TPM I always try to follow a pretty strict policy of not talking about topics I don’t know a lot about or keeping to issues sufficiently vague and ambiguous that no one can tell. Since neither applies on this market meltdown stuff, I’ll frame this as a question.

David Kurtz and I were just going over this and we seem to have a different idea of what happened with the Bear Stearns deal, or at least different emphases in understanding the story.

At the end of trading on Friday Bear Stearns was at approximately $30 a share. JPMorgan bought it over the weekend for $2 a share. And even that latter amount was cushioned by extensive guarantees from the Fed insulating Morgan from a lot of Bear’s vast liabilities.

Looking at this from the outside, one of the most striking things about this story is that with all pessimism on Wall Street, all the panic to unload stocks in companies with heavy mortgage exposure, market knowledge was still out of it enough to have overrated the value of the company 15-fold.

Now, market value is an abstraction and can become pretty notional in the midst of a crisis: an asset is worth what you’re about to find someone willing to pay for it. So it’s likely a mistake to reify the $30 and the $2 market valuation to too great a degree. On the other hand, David Kurtz thinks that JPMorgan got a crazy bargain and that the fed muscled Bear into selling at far less than its actual value. And at The Atlantic, Clive Crook suggests that, yes, the Fed forced Bear to hand itself over to Morgan for much less than it was worth, that Bear’s shareholders likely would have recouped more of their money if the company had simply gone into bankruptcy.

To get one matter out of the way, let me say, that I completely recognize that the Fed must have brought a tremendous amount of pressure to bear to make this happen. And they also seem to have put the taxpayer on the line for a lot of the risk involved in this transaction.

But here’s my question, what is the precise nature of the pressure the Fed is able to bring to bear on a company like Bear Stearns in a case like this. On Friday, the market capitalization of the company was $3.5 billion. Let’s say that was dramatically but not wildly off. Let’s say a more realistic valuation of its net assets was $2.5 billion. It went over the weekend for about $2.25 billion less than that. So again, what kind of pressure is the Fed able to bring to bear to get the Bear Stearns board and shareholders to fold its cards leaving more than $2 billion on the table if they didn’t have to.

That strikes me as more money than private shareholders are willing to give up just for the greater good. Then again maybe a lot of the stock is owned by big funds that see more potential losses for themselves in a wider meltdown than in letting Bear go down the tubes? In any case, this isn’t a rhetorical question. I’m curious to hear your opinions and even more curious to hear from those of you in the financial services sector who might have some facts to shed more light on this question.