According to CNBC, JP Morgan is acting as an intermediary for Bear Stearns because Stearns doesn't normally have access to the Fed discount window. Lucky for everyone, this is a nonrecourse loan! JP Morgan is using some pile of shit from BS as collateral, and if that collateral isn't worth anything JP Morgan won't be held liable if there's a default.
No worries. The Fed did this type of thing in the 30s, too.
