Bear Stearns

NEW -> Contingent Buyer Assistance Program
ROFL!





Must... refrain... from... comment...





Damn it! I never thought of a plate like that, but at least we have a mutual appreciation for it.
 
<p>prof - Thanks for the netiquette. I had no idea, and I think I have broken every one of the rules.</p>

<p>Oh well, there is no time like the present to learn.</p>
 
Old Pros Size Up the Game

Thorp and Pimco's Gross Open Up on Dangers Of Over-Betting, How to Play the Bond Market



<p>http://online.wsj.com/article/SB120614130030156085.html?mod=hps_us_editors_picks</p>
 
From <a href="http://www.esquire.com/the-side/opinion/dont-fear-bear-stearns">Barry's Esquire</a> rant via <a href="http://www.minyanville.com/articles/jpm-Fed-T-BSC-schw-fre/index/a/16321">Minyanville</a>...





<img src="http://bigpicture.typepad.com/comments/images/2008/03/18/ebaydone.jpg" alt="" />
 
<a href="http://adamsoptions.blogspot.com/2008/03/can-you-afford-not-to-watch-jim-cramer.html">Eh, Cramer was right about BSC, er not</a>...





This is a must read for anyone who listens to this asshat, this should be a lesson for you, <a href="http://www.thestreet.com/funds/smarter/891820.html">if this one already hasn't been</a>. Oops, they pulled the article showing his gawd awful f*ck ups from the tech bubble burst.
 
<p>Is it odd that no one in the MSM is asking why JP Morgan is willing to pay $10.00 per share for a stock that is worth $0.00, and JP is willing to take on any liabilities greater than $29B? And before anyone thinks that BSC has good faith worth or some other esoteric worth, the CEO of BSC went to the Fed last week and said Bear Stearns is insolvent, bankrupt, worthless. It isn't a liquidity problem. It is an insolvency problem. So, why is JPM willing to pay for a worthless stock? Do you see any other companies bidding for it? <p></p>

<p>And why is the Federal Reserve ready to trash $29B of it's balance sheet?</p>
 
<p>You mean more that the Federal backstop?</p>

<p>I also heard that it is selling for more than $2.00 because the bondholders want the deal to go through so big bond holders are buying so they can vote yes. I hope that the billion dollar buyer sues the Bejasus out of the CEO and any others who lied to the media just before the bail out.</p>
 
<p>Oops, should have read Calculated Risk first. So they're raising the price to 10 bucks, maybe. The billion dollar buyer will still sue.</p>

<p>I think this will turn into a steaming pile of lawsuits, at ANY price.</p>
 
<em>>>I think this will turn into a steaming pile of lawsuits, at ANY price.</em>





I agree. With the credit crunch and the instability of the "monoline" insurers, there are a bunch of bond lawyers sitting around with no work and collecting fat paychecks. The litigators figure they can at least get some use out them by having them summarize depos.
 
<p>Here is the real reason JPM is overpaying for Bear Stearns and the Federal Reserve is willing to trash it's balance sheet to the tune of $29B. </p>

<p> <a href="http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/23/ccfed123.xml&page=1">real_reason</a></p>

<p>And thanks to Nude for teaching us how to shorten and post the whole "link thing".</p>
 
"I don't think most people have any idea how bad this chain could have been, <u>and I am still not sure the Fed can maintain the solvency of the US banking system.</u>"





Whoo boy. (The quote is from Awgee's link above.)





Couldn't the Fed maintain solvency by printing more money? (Not that that is a great idea.)
 
<p><em>"Couldn't the Fed maintain solvency by printing more money?"</em></p>

<p>From my understanding, technically the federal reserve could maintain it's own solvency and the solvency of any financial institutions of it's choosing by issuing credit, (printing money), but in order for the federal reserve to maintain some show of legitimacy of it's balance sheet, it has to buy treasuries from the US Treasury Dept. and the Treasury Dept, must be willing to borrow. Not a stretch, eh?</p>
 
<p>Ok, from the article I deduce that the problem isn't really half a quadrillion. (I like saying that -- quadrillion, quadrillion.) Most of that is a wash? </p>

<p>The article said in the case of a meltdown, it would be "viciously" one sided. Why? If you've used these to hedge on munis, you still have the munis. Hmmm, it's because the mtg backed securities are worth 50-60 cents on the dollar? Surely it is clear right not the counterparty can't pay? I don't see why the stock mkt didn't drop as much as a Ft. Meyers/Stockton house months ago.</p>
 
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