NEW YORK (CNNMoney.com) -- It looks like the Federal Reserve has opened up a can of worms.

The Fed, by agreeing to take part in JPMorgan Chase's bailout/buyout of Bear Stearns (BSC, Fortune 500), sent the signal that it might be willing to step in and help other firms take over struggling banks.

The central bank said it will back $29 billion of potential losses by Bear Stearns. JPMorgan Chase (JPM, Fortune 500) is only on the hook for a $1 billion hit.

The Fed did not make a similar guarantee when Bank of America (BAC, Fortune 500) agreed to buy beleaguered mortgage lender Countrywide Financial (CFC, Fortune 500) in January. But some worry that the Fed may have to step in to save the deal if the mortgage implosion worsens.

Now other banks appear to be angling for a spot at the Fed trough. In an interview with the San Francisco Business Times last week, Wells Fargo (WFC, Fortune 500) Chief Executive John Stumpf said his bank "would not be averse to a Fed-assisted transaction" and added that "fixer-uppers don't bother us."

Well, who wouldn't be interested in a fixer-upper if you know that the Fed will be there to help you deal with all those losses? Heck, I'd buy the house from that Tom Hanks movie "The Money Pit" if a friendly central banker was willing to reimburse me for all the renovation costs.

The story suggested that Wells Fargo could be a natural acquirer for National City (NCC, Fortune 500), the Cleveland-based regional bank that has been hit hard by the subprime mortgage meltdown and is, according to several reports, looking for a buyer.

If the Fed helps Wells Fargo buy National City or another bank that has been whacked by the credit crunch, when does it stop? How many banks should the Fed save? And how much taxpayer money will be put on the line to guarantee potential losses that the buyers would incur?

Hopefully, the Bear Stearns rescue was an isolated incident, a deal that the Fed felt it had to take part in because of the risks of having one of the nation's top investment banks, one that is a particularly big player in the all important bond and mortgage-security markets, go under.

Richard Bove, a bank analyst with Punk, Ziegel & Co., said he thinks the Fed had to save Bear Stearns but he did not approve of the way the Fed did it. He said that during the last major banking crisis in the late 1980s and early 1990s, it was routine for the Federal Deposit Insurance Corp., the regulatory agency that insures bank deposits, to step in and save failing banks.

But Bove pointed out that what the FDIC usually did was fire the banks' top management teams, eliminate their boards of directors and even place the banks in bankruptcy before negotiating sales to more stable banks. That obviously didn't happen here.

"The Fed did the right thing but they did not do it in the right way. Sometimes things become too big to fail and this was a pure bailout. They let management off the hook," Bove said.

It would be disturbing if the Fed's involvement in the Bear Stearns deal was the start of a trend. Firms should be allowed to fail - even if it causes pain in the process.

Weeding out the financial services companies that took undue risks during the housing bubble is one way to possibly strengthen the financial sector going forward and send the strong message to Wall Street that rampant speculation has its consequences.

Agreeing to cover huge losses so that mammoth financial institutions can get even bigger without having to worry about the risks of a deal going awry strikes me as irresponsible.

Whatever happened to the concept of "buyer beware?" It doesn't seem to apply if you're a big bank looking to buy a near-bankrupt rival on the cheap.

Money under the mattress? Say it ain't so

I was originally going to write a little rant about the results of the latest Quick Poll we have on our site. According to this admittedly unscientific survey, nearly a third of you said that you think "under your mattress" is the most comfortable place to put your money now.

That's disheartening. Yes, the economy has hit a rough patch, to say the least. And the stock and bond markets are in flux. But panicking and putting your money in an asset where the only guaranteed return you're likely to see is a huge increase in dust bunnies is not a sound idea.

For the long haul, you don't want to overreact and pull money out of stocks. I'd go on at more length about why you should stay in the market but my colleague Walter Updegrave at Money magazine has a great blog post on our site today about this very topic. Check it out. It's a reasoned, rational take on what to do in these troubled times.

Issue #1 - America's Money: All this week at 12 pm ET, CNN explains how the weakening economy affects you. Full coverage.

Have you lost your job, your business or your home? Are you raiding retirement accounts to pay the bills? We want to hear from you. Tell us how you're being affected by the weakening economy and you could be profiled in an upcoming story. Send emails to realstories@cnnmoney.com.