The controversial deal orchestrated by the Federal Reserve that pushed Bear Stearns into the hands of JPMorgan Chase, at the height of the sub-prime crisis, will turn into billions of dollars in gains for for JPMorgan Chase.

The deal will result in an immediate second quarter gain of $1 billion for JPMorgan Chase, admitted Chairman and Chief Executive Officer Jamie Dimon.

The projected $1 billion gain reflects the addition of Bear Stearns capital, offset by roughly $9 billion of losses reflecting asset sales, purchase accounting, restructuring, litigation costs and Bear's second-quarter losses, Dimon told a UBS investor conference.

In the longer term, after some short-term losses, Dimon said Bear's investment bank would generate between $800 million and $1.13 billion of earnings annually for JPMorgan.

Thus, a deal that could not have been done without the Federal Reserve providing a $30 billion dollar line of credit for JPMorgan's takeover of Bears Stearns, now, in just weeks after the deal, will mean short-term gains of a billion dollars for JPMorgan Chase and down the road a billion annually for JP Morgan Chase.