Bear Stearns Fails - Bailed out by FED Reserve for 28 days

[robertsondavies]

I spoke with a couple current employees today... you're certainly right about the shock etc... it is very sad..

and the way Bear Stearns comps people, they are forced to take a large chunk in stock, which vests over periods of years... in addition, even upon vesting, it is 'frowned upon' to sell shares.. so many rank and file employees have lost millions and millions in the last year or so, on the stock.. and half those losses in the last three days..

apparently all the line managers are gearing up their powerpoints, to stay at their HQ all weekend to do a beauty show - and receive a bid by Monday -

i hope its not a "takeunder" bid.

p.s. bot more at 31 and 30 and 29.. YIKES

 

[Babyblue]

I cannot believe the Fed is bailing them out. Bail out the poor janitor that lost his job in South Florida due to the budget cut backs.

 

[SHELLY]

I cannot believe the Fed is bailing them out. Bail out the poor janitor that lost his job in South Florida due to the budget cut backs.

This little Bear Stearns issue pales in comparison to what is coming down the pipe.

Earlier in the week the Fed goosed the market by announcing it will swap treasuries (...uh "loan" treasuries for 28 days at a pop ), to cash-strapped banks and investment houses, and accept "nonrecourse" home-loan packages as collateral to backup these loans :shock:

So those Federal Reserve Notes (aka: US Dollars) which are backed by "the full faith and credit of the U.S. government"— will now also be backed by the "full faith and credit of subprime mortgages."

http://www.youtube.com/watch?v=13qW...blogspot.com/2006/05/foreclosure-stories.html

 

[Miss Critter]

Wow, that video is hilarious, insightful, clever and terrifiying, all at once.

Hard not to get increasingly cynical in my old age.

 

[goofer]

The deal for Bear Stearns by J.P. Morgan works out to $2 a share. There is going to be a CRASH on Wall Street tomorrow.

 

[Little Fish]

Robertsondavies:

Very sorry to say that BSC is being purchased by JPMorgan for $2/share... This is unbelievable.

http://biz.yahoo.com/rb/080316/bearstearns.html?.v=6

Little Fish

 

[elgordoboy]

Robertsondavies:

Very sorry to say that BSC is being purchased by JPMorgan for $2/share... This is unbelievable.

http://biz.yahoo.com/rb/080316/bearstearns.html?.v=6

Little Fish

wow

 

[sandybanks]

I noticed that General Fallon resigned, and I noticed the reason.

One of these days W and his henchmen are going to figure out that it is REAL hard to find a competent military man who is also willing to serve as a fall guy.

They MIGHT actually have to let one run his own shop someday.

I saw that the other day and my heart dropped. I guess we will be in Iran by the middle of the summer.

Admiral Fallon was a true American who had more sense than any military leader we have had in quite some time.

 

[elgordoboy]

What is the risk in this for JPM? With the fed backing the "less liquid" assets? Would this be a good time for going long JPM as they are said to be less exposed to the overzealousness of recent past?

 

[robertsondavies]

i need a mojito .. $2 is a real surprise..

i know many people who worked there, and have a good chunk of life savings tied up in BSC stock.. i lost on my speculative trade from Friday to Monday, it appears 95% of my bet was lost, and it stings to lose any time, but this was pure gambling -

people are going to panic now... and think Lehman is next. etc etc.... capital preservation, boomers pull their money out of the markets - and voila, we have not just a bear market, but a deep recession....

the recession of 2002 and the recession of 1991 did not take down our biggest investment banks did it? This looks to be worse than a 70's style recession

look out below.

i'm going back to cash.. going to sell the JOE, going to cover the CROX