Tomorrow will mark the 1 year anniversary of the government brokered sale of Bear Stearns to JP Morgan for $2/share and of course $30 Billion of our (taxpayer) money.

If you haven’t seen Frontline’s 1 hour news report on the wall street meltdown, here’s a link to watch it online.  http://www.pbs.org/wgbh/pages/frontline/meltdown/

This is a great show that covers the timeline of the meltdown from Bear Stearns, Lehman and AIG.  It helped me understand the motivations behind the banking bail outs a bit more.

Systemic Risk and Moral Hazard often come up in the show just as they do today as conflicting issues.   Is there enough risk to the banking system to justify bailing out a company?  Won’t bailing out a company cause other companies to behave as if they too will also be bailed out?

It would be interesting to hear more about the relationship between then secretary of the treasury Henry Paulson and CEO of Lehman Brother Richard S. Fuld, Jr. The Frontline report seemed to imply they were heated competitors and that perhaps some of that history led Paulson to not bail out Lehman.

However even after this show I still must say that the lack of transparency in the handling of the banking bailout still makes me furious.  I wonder if some transparency could have reduced the systemic risk in Wall Street.  If we had know just how leveraged these companies were, would quite as much money been poured into them?