Seals the Deal

I think that anyone who knows the Bush administration would already have figured this, but now it's official:

CNBC's Steve Liesman reports on a letter from Treasury Secretary Paulson to New York Fed President Tim Geithner. In the letter, Treasury agrees that the Fed can bill Treasury for any losses from the Bear Stearns deal.

That's right. Any losses in JP Morgan buying Bear Stearns will be covered by taxpayers the Treasury.