This looks like a bail out, but it’s not. Bear Stearns could not open for business today. The Fed got JP Morgan to come in and put their hand on the gushing wound, but it is just a temporary measure for others to come in with buckets to collect any viable body parts.

Call it a “Term Fire Sale Facility” that only looks like a bail out. Make no mistake. Bear Stearns is done. It will be bought, absorbed or taken apart and sold for parts. Doing this for an investment bank (whose main business in 2007 was backing subprime hedge funds), is just to make the “bail outs” to come not look like a total collapse of the financial markets.

JP Morgan is next. If Citigroup doesn’t fall first. The next one to get run through the egg slicer on the investment bank side will be Merrill Lynch.

Remember LTCM? Central Banks have up to $1-2 Trillion to do this (LTCM was $1 Trillion in 1998). The CBs have plenty of “bail out” left in them.