A year ago, a share of The Bear Stearns Cos. Inc. (BSC) would have cost you $150. The “why” has already been discussed, but no one seems to be concerned about the “how” right now, particularly where white knight JPMorgan and the U.S. Federal Reserve are concerned.
Yesterday, the shares closed at $11.26 - and that’s after they soared 90% from the opening bell price on news that JPMorgan Chase & Co. (JPM) had boosted its bid.

The “why” has already been discussed, but no one seems to be concerned about the “how” right now, particularly where white knight JPMorgan and the U.S. Federal Reserve are concerned.

On the surface, this tie-up is being billed as a bailout to avert another crisis on Wall Street. However, upon closer examination I think it’s more evidence that the Fed suffers from “attention to deficits disorder.”

I put this very question to Jim Rogers during an exclusive interview last Saturday in Singapore.

Mr. Rogers stated: “I’ve read the Federal Reserve Act. Nowhere in it does it say you’re supposed to bail out Wall Street. Their mandate was to have a sound currency and it was later expanded to help employment. But nowhere does it say you’re supposed to bail out investment banks.”

Then, as Rogers is well noted for doing, he put it more bluntly: “You don’t see a bunch of 29-year old cotton farmers driving around in Maseratis and flying in private planes to exotic places.”

He continued, “You see a lot of guys on Wall Street doing that and the idea that we’re supposed to bail them out is ludicrous. I don’t see any of those guys sending their bonus checks back. Huge amounts of money were made in the debt market we know now incorrectly, if not fraudulently… and now we’re supposed to bail them out?”

“It’s insanity,” Rogers said.

(I’ll have Mr. Roger’s complete comments on this and a number of related global investing topics in an upcoming installment series so stay tuned.)

Here at Money Morning, we couldn’t agree more with Mr. Rogers, which is why we think all is not what it seems with the Bear Stearns/JPMorgan deal, any more than we did with the Bank of America Corp.’s (BAC) buyout of troubled mortgage lender Countrywide Financial Corp. (CFC).

So, let’s tally up the winners and the losers.

JPMorgan didn’t get Bear for the original paltry $236 million offer, but $1 billion isn’t bad. Especially when you consider JPMorgan will get complete access to Bear’s operations, including the legendary prime brokerage and clearing operations, which are regarded as crown jewels. JPMorgan will also get Bear’s brand spanking new Madison Avenue office tower that could be valued north of $1 billion on its own.

Meanwhile, as part of the deal the Fed ponies up another $30 billion to guarantee Bear’s more “illiquid assets” (read: toxic sludge) - so JPMorgan doesn’t have to trouble itself with actually running a failing business.

Which begs the question: Why can’t somebody do that for millions of Americans who are having trouble making ends meet right now as a result of all this?

The bottom line is that there’s nothing “Federal” about this crisis today any more than there was a year ago when we began sounding the alarm bells and taking a more defensive posture.

Even though it’s being spun as a good thing, by stepping into the fray yet again, the Fed is involuntarily forcing you and me and every other taxpayer to act as guarantors.

And then there are the insiders.

The former CEO Mismanagement Club, including members Chuck Prince, Stanley O’Neil and Angilo Mozilla are walking away with hundreds of millions, after almost single-handedly destroying an entire industry and perhaps even wrecking our economy in the process.

And what about the timing?

The Fed - Bear Stearns - JPMorgan triad came together literally over the weekend. And you don’t just crank out a deal like that overnight, no matter what anybody says about burning the “midnight oil.”

There are many who will argue that saving Bear Stearns staves off a wave of defaults from other interconnected borrowers and lenders. That it somehow gives the system “breathing room to pay off Bear’s debts gradually” as Business Week’s Matthew Goldstein so eloquently put it.

I’ll concede that it might… if we are really lucky.

My concern, however, is that the cost of trying to prevent a recession will ultimately cost us more than simply enduring one.