The Federal Reserve trimmed the estimated value of Bear Stearns Cos. assets it took on last month and said lending to securities dealers fell to zero for the first time since it began extending the credit in March.
The central bank said today in Washington the "fair value" of the Bear Stearns assets was $28.9 billion as of June 26, a $1.1 billion drop from the total in March.
Down a billion is not so bad, eh? Not so fast. That's using Bernanke's fantasy valuations. It's what he wishes the assets were worth, not what they are actually worth:
The Fed is valuing the portfolio in accordance with accounting guidelines that call for an estimate based on sales in an "orderly market," rather than a hypothetical forced liquidation. The value doesn't necessarily reflect what the securities would fetch if Maiden Lane [the Fed's Special Purpose Bear Stearns Bailout Vehicle, SPBSBV] tried to sell today.
And the Bear Stearns $30 billion is just the beginning. Then there's the Countrywide $50+ billion from the Federal Home Loan Bank of Atlanta. And the billions loaned to Wall Street with garbage collateral under the Primary Dealer Credit Facility. And soon the $300 billion Dodd-Frank orange lender bailout bill. The Fed and Congress are intent on destroying the dollar and the taxpayer to bail out bad lenders.