How did the economy get into this mess? Could Cash Advances help?

Bear Sterns

Federal Reserve Bank of New York Building

Would cash advances help the U.S?  It all started with Bear Sterns perched on the threshold of bankruptcy. That was back in the last week of August and the beginning of September 2008. Bear Sterns needed to do something and do it fast or the doors would not open for trading again. Bear Sterns needed help in the way of a loan and what a loan it would be. They needed help in the neighborhood of some 600 million dollars, but whom could the Wall Street super giant turn to for that much money?

Can I speak to Mr. Bernecke

A call was placed to the Federal Reserve Bank and Mr. Ben Bernecke, in particular, to inform him of the situation that was unfolding. After listening to what the inevitable outcome would be, Mr. Bernecke decided that the only way the Federal Reserve Bank would be able to help would be to offer the loan through a third party that would be charged with overseeing that the funds were administered properly.

I’d like you to meet J P Morgan

In comes J P Morgan. They would take the loan/cash advances and eventually total control of the now defunct Bear Sterns. This was the start of the end. It was going to take less than a week for the housing market to come to a screeching halt as the banks caught wind of what was happening with Wall Street and the Federal Reserve Bank. The nine major lending institutes froze up and stopped lending money. They wouldn't even lend funds to the most stable and lucrative companies. All those haphazard homebuyers were now left wondering, “How am I going to pay my mortgage?” ... click here to read the rest of the article titled "How did the economy get into this mess? Could Cash Advances help?"