Wikinvest Wire

Mmmmmm, Juicy Fruit

Sunday, March 16, 2008

Well, the news reports are saying that J.P. Morgan Chase is "rescuing" Bear Stearns by buying them for two dollars a share. The term "rescue" is apparently being used loosely, that is, in the same sense that it might be applied to the pair below.
That would be Bear Stearns on the left, J.P. Morgan on the right.

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Tim said...

From the How Business Happens blog:

What a tough pickle! The FED has to keep Bear Stearns assets from bankruptcy and thus marked to market, because any price set for any of these assets will suggest how another $2-4 trillion nominally valued securities is likely priced. So the FED forks over another 30 billion so JPMorgan can pretend to buy Bear Stearns. And who gets hurt?

About a third of Bear Stearns stock is held by employees, none of whom will see more than 10 cents on the dollar. Recall a few days ago the head of Bear Stearns assured the world all was well. A few days later, the stock lost almost 50%.

The other two-thirds is where? Pensions, savings, etc. Of course this is far from over. The FED is fast running out of bail-money. The Chinese declined to save Bear Stearns.

pft said...

I guess thats why Spitzer got Spitzerized. They didnt want any sherrifs coming after them, so they done shot the sherrif.

Watch out Lehman Brothers shareholders, you might be the bandits next victim.

I mean, couldn't the Fed have just offered bear the same deal as JP Morgan. Sorry, I forgot, JP Morgan is a big shareholder of the Fed. What was I thinking.

Anonymous said...


Anonymous said...

Total financial meltdown is in the works. This is the first time in history that the Fed has bailed out an investment bank albeit indirectly.

So how to make money off of this? Apparently somebody bought a boatload of options just before this was announced: 850K -> 30M

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