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Loophole Legend: Strong Guarantee Well Known To Bankers

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Yesterday we spent quite a bit of time explaining why the loophole legend probably isn't true. Now it seems that traders connected with the deal are lending support to this argument, saying that the notion that JP Morgan Chase's strong guarantee of Bear Stearns liabilities was an oversight was concocted ex post facto.
"It was well known by bankers at JPM during that first weekend of negotiating that a guarantee was being baked into the deal," an anonymous trader tells a Queens based reporter who maintains the GreenFieldsOfTheMind blog. "No idea what the conversations were at the highest levels but from the way it was described to me it did not sound like an oversight/loophole. Only after the fact was it talked about that way."

The Loophole Legend