Other sources of income are the interest on foreign currency investments held by the System; fees received for services provided to depository institutions, such as check clearing, funds transfers, and automated clearinghouse operations; and interest on loans to depository institutions (the rate on which is the so-called discount rate). After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.
The Fed is a major investor of the Treasury and Treasuries are a major investment of the Fed. Any perceived threats to this relationship, like it or not, will supercede whatever one feels as fair or just. This relationship is extended to Wall Street through the Repo Market - of which primary dealers are very important. Any threat of a disturbance in this market is taken very serious by everyone involved. Bear Stearns was a player in this market, and thus its perceived financial weakness was a problem to everyone involved. For an elaboration on the importance, and possibly some though behind this action see the proposal by the President's Working Group on the Financial Markets regarding the formation of "NewBank" in 2005.
4) JPMorgan is one of the two clearing banks for government securities (Bank of New York is the other one). If you look at how their stocks have performed since this crisis hit, you will find that they have done quite well. They have also been the only two banks that really have been "immune" from the subprime crisis, which probably isn't a coincidence, given their importance. If the proverbial shit hits the fan, these banks will get a good deal. It may not be fair. It definitely isn't the free markets. It's just how it is.
5) Bear Stearns refused to bail out LTCM in 1998, at the dismay of the Fed and the rest of Wall Street. All along it was their prime broker and profited from all their trades. While I believe that the events leading up to and after LTCM can explain much of the financial and political history of the last 10 years, that is for another place and another time. To those who thought the treatment of Bear Stearns wasn't "fair", tell that to those on Wall Street who thought the same of Bear Stearns ten years prior. Payback's a bitch.
So, while, this may not change any opinions you have regarding the information. It's time to face the reality of the situation. There were many forces acting against Bear Stearns and for JPMorgan, as well as simply that the deal got done. Like it or not, that is how the world works. So while it is easy and tempting to complain about what was done, it is not constructive to simply dwell on the situation and propose alternatives knowing that they will never be examined. Rather, we should examine the real motivations for why this went down. It is not debatable whether they had the power to do this, because they just did. What should be debated is whether they should have the power, and more importantly if they do have the power, whether they should have the motivation.
Just my two cents. Would love for debate on the topic.