Taleb said that a point he had just made, which mentioned J.P. Morgan, turned out to be true with the Bear Stearns rescue.

True if records of the March 2008 Bear Stearns rescue show that JPMorgan Chase took over or guaranteed Bear Stearns' obligations (Fed-backed bridge financing, JPMorgan's guarantee of Bear's trading obligations and its acquisition), so that counterparties trading with Bear in effect had JPMorgan as their counterparty, as of 2008-04-03. Mostly true if JPMorgan guaranteed or assumed Bear's trading obligations but there was a minor detail such as timing or a gap in the guarantee's scope. Mixed if JPMorgan took over only part of the exposure and other significant exposure stayed with Bear or the Fed. Mostly false if the Fed or another party, not JPMorgan, was the effective counterparty, with JPMorgan's role marginal. False if JPMorgan did not assume or guarantee Bear's obligations.

Set before the research began.

1. E1 JPMorgan Chase To Acquire Bear Stearns JPMorgan Chase & Co. (news release, filed with the SEC) · 16 March 2008

   “Effective immediately, JPMorgan Chase is guaranteeing the trading obligations of Bear Stearns and its subsidiaries and is providing management oversight for its operations.”

2. E2 be12368022-ex99_3.txt - SEC.gov Bear Stearns Companies Inc. / JPMorgan Chase & Co. (joint press release, Exhibit 99.3, filed with the SEC) · 24 March 2008

   “The JPMorgan Chase guaranty of Bear Stearns' trading obligations has also been significantly clarified and expanded.”

3. E3 Matter of Bear Stearns Litig. (N.Y. Civ. Ct. 2008) Justia Law (court opinion, 2008 NY Slip Op 28500) · 2008

   “JPMorgan's obligation to guarantee Bear Stearns' trading obligations, in the event of a negative vote on the merger, was reduced from one year to 120 days.”

4. E4 Matter of Bear Stearns Litig. (N.Y. Civ. Ct. 2008) Justia Law (court opinion, 2008 NY Slip Op 28500) · 2008

   “During the week, the NY Fed directly loaned the company approximately $30 billion each day and JPMorgan loaned it approximately another $13.4 billion.”

JPMorgan's March 16, 2008 release, filed with the SEC, states that "effective immediately" it was guaranteeing the trading obligations of Bear Stearns and its subsidiaries (E1). The joint release of March 24 says this guaranty was "clarified and expanded" (E2). That supports the claim that trading with Bear in effect meant trading with JPMorgan. However, a 2008 New York court opinion says the guarantee would run for only 120 days if shareholders voted against the merger (E3). It also says the New York Fed lent Bear far more than JPMorgan during that week (E4). These limits on the guarantee's scope, and the Fed's role in the financing, fit the "mostly true" grade rather than full "true".