$2 a share. That's pretty good. I though it might be $1 a share. This is much much better. I am deeply relieved and I am sure Joe What's his Name is too.
Joe Lewis reportedly put about a billion into BSC. At $2 a share he'll get out with $22,106,926. What kind of return is that? I don't do reverse numbers. LOL.
I have serious questions about the Federal Reserve committing massive amounts of cash to a financial institution without Congressional approval. If it works, they'll get away with it, but if it doesn't work and the Fed loses massive amounts of money on defaulted securities, Congress is going to have a very interesting conversation with the leadership of the Fed.
say a high-flying employee of the bank just got paid $1m bonus last year. I'm guessing they'd have to pay taxes on that, something like $300k? I'd also guess that it would be mostly stock. Lets say 90%.
So they've just paid $300k in taxes, have $100k cash, and their stock is now worth around $20k (lets assume $90 was their strike, which is where it was back in november).
So...you just LOST $180k.
is this right?? so the guys hit hardest are the guys who did BEST at Bear last year (the CEO?)!!
I like watching Bloomberg Asia... the dude is super lethargic... he's kind of bored with the whole end of days thing... S&P futures down 13 points after being up 15... Bloomberg dude is yawning.
this reminds me very much of when BAC announced they were buying Countrywide - the markets rallied on that news as well and eventually sold off. We'll see what tomorrow brings but a strong rally wouldn't surprise me - neither would a big selloff....
Pick it up on the web. It is easier.
I think the reason the number of visitors is so high is that this is the only prolific financial blog that has the story so far.
"WASHINGTON, March 16 (Reuters) - U.S. Treasury Secretary Henry Paulson said on Sunday he was pleased with the deal for J.P. Morgan Chase & Co. (JPM.N: Quote, Profile, Research) to buy Bear Stearns (BSC.N: Quote, Profile, Research) and with the Federal Reserve's latest actions to enhance market stability."
So after taking a $6 billion pre-tax charge for this deal it is only $1 billion accretive to JPM's earnings when fully integrated - and no doubt assuming the market returns to the salad day - and that aint happening anytime soon. Sounds like a crappy deal for JPM but better than the alternative of a BS meltdown....
"WASHINGTON, March 16 (Reuters) - U.S. Treasury Secretary Henry Paulson said on Sunday he was pleased with the deal for J.P. Morgan Chase & Co. (JPM.N: Quote, Profile, Research) to buy Bear Stearns (BSC.N: Quote, Profile, Research) and with the Federal Reserve's latest actions to enhance market stability."
risk,
I would bet if you asked BSC shareholders about the stability of the market, they may disagree with "Henry".
sadly, not long Bear CDS...but on the plus side, not short either! Wow their are going to be some guys hurting in the credit markets tomorrow (and quite a few celebrating!).
Must say that I really feel bad for the long term employees of Bear Stearns. A colleague's of mine, his mother retired and had $50k in stock as of earlier this year (long term employee of the firm). We shouldn't celebrate this. Let us mourn its passing and prosecute those who created this situation. The management, the creators of the toxic debt instrumentsm, the hedge funds and anyone else involved...
For bondholders, no guarantee now, but JPMorgan will assume the capital structure of Bear when the deal closes. I believe this means JPMorgan is responsible for all the debt.
USD in waterfall mode now vs. JPY. Below 98 last I checked. Fed cut discount rate .25 pts - I guess they didn't even want to wait for tomorrow morning. Some kind of bizarre attempt to stick save Asia and Europe, perhaps.
This shortened trading week is gonna be real interesting, to say the least.
Someone posted the other day that Bear's assets were valued roughly about 600B with about 30x leverage? Now it's sold for 0.26B! WTF! What about other IB's? What are the market values for those assets held by other IB's? Nuke portfolios are imploding.
Amazing. Bear Sterns sold at $2. If I was a foreigner I would be bailing on America. Jesus, this is Katrina. A disaster in the happening, the government of the US looking like a clown.
Haven't ever seen the dollar tank this fast against the Yen. USD are backed by the full faith and credit of, oops, I mean, are backed by subprime mortages now being held by the Fed. Oh.
The shareholders have up to one year to approve. If they don't approve, it gets submitted to them again and again until they do. After one year, it's over. Ben figures the problem will be fixed by then.
You'd think bankruptcy would be better for the BSC shareholders. At least in that case they own the sacred cow of the whole deal--the BSC HQ building in Manhattan!
Greenspan just said this is the "The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war. It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities."
The Federal Trade Commission's Bureau of Competition champions the rights of American consumers by promoting and protecting free and vigorous competition. The Bureau:
reviews mergers and acquisitions, and challenges those that would likely lead to higher prices, fewer choices, or less innovation;
Mr Cayne, how'd that bridge tourniquet - er, I mean tournament - go this weekend? Toke that one up to experience I guess. I mean, like dude, what's to do? Big inhalation sound.
Greenspan just said this is the "The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war. It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities."
Greenspan watches someone else clean up the mess he helped to create. He's like a college student who trashes a house with his buddies during a big party....and then watches everyone in the neighborhood clean up the place the next morning.
I'm kinda a financial newbie (and by 'kinda' I mean 'totally'). I'm a fan of this site and learning a lot, but want to make sure I understand what's going on, because it seems pretty dire to me.
This is my understanding: You have a respected bank (Bear Stearns), investing in these mortgage securities that are turning out to be junk, and they're no longer able to hide that their assets are pretty much worthless.
They're about to go bankrupt, but that would damage the economy and make it clear that everyone else's securities were junk too, so the federal government rides to the rescue and convinces another bank to bail Bear Stearns out, hoping to stop the panic. Bear Stearns, meanwhile, is so worthless, that the Fed has to sweeten the pot, so to speak, to even get Chase to agree to the deal.
Chase agrees to buy Stearns for less than its materials assets (such as the building) is worth, which to me means that Bear Stearns was in extremely bad shape, has a lot of debt and is pretty much a financial albatross to anyone who would buy it. Am I close or way off in my understanding and if I was a Chase shareholder, should I be worried ?
I'm not sure I understand the worry about what the shareholders may say in this particular case. If they don't like $2, what option do they have? Would they prefer $0?
I'd be surprised if Bear's executives didn't face personal suits from securities lawyers starting Monday morning, featuring snarky quotes from the last week. Not sure how that impacts whatever price should be paid for Bear today.
I am quite the newbie too, but I will try. BS was worse than just worthless. It had liabilities that can't begin to be measured. The Fed paid JPM to take the ticking time bomb - a bunch up front and probably some guarantees we don't know about.
please stop saying they are buying for less than stupid building!!!!!! its makes you look wildly ignorant to all that have 2 min of fin analysis....there are 100s of billions of LIABILITIES to be assumed here. the 2 bucks is a token to be used for consumation of the deal....in actuality, the stock is a whipeout and the 80 BILLION of unsecured bonds are deeply impaired!!!!
Sorry, i dont normally comment, but those statements got too fcking stupid to let pass.....
Just the beginning downfall of Wall St crooks aided and abetted by policies of Greenspan, The Fed, the inept and incompetent Bush admin and their pathetic cronies.
America please make sure and thank these asshats for this financial mess because you'll be paying for it for years to come !
I sure am glad the FED is strong on the dollar. Paulson this morning was a wonderful look at "Who are you going to trust me or your lying eyes" He really said nothing. The emperors were partying while Rome burned.
hy
got to disagree with you on those bonds. Anybody that bot them on Friday is going to make out like a bandit.
They will be JPM bonds in 90 days or so.
Several years ago, like December 2005, FTC was investigating Bear Stearns in regard to EMC Mortgage:
Re: A Bear Stearns (BSC - Cramer's Take - Stockpickr) unit is coming under government scrutiny in a probe of residential lending to risky borrowers.
The investment bank's EMC Mortgage unit received a request for documents from the Federal Trade Commission to see whether it violated consumer protection laws, according to The Associated Press.
The request follows a Dec. 8 resolution by the FTC authorizing investigations into subprime lenders, loan servicers and brokers.
Bear Stearns disclosed the inquiry in a regulatory filing by a mortgage trust it set up. It said it's cooperating with the investigation.
I researched my anus off and never found a resolution to that case, it was dropped...I guess, but does anyone here recall anything about that? I find it interesting that FTC used to have power before The Bush Coup, and for some reason, this was taken off the front burner and forgotten. needless to say, FTC was on the right track with subprime corruption in 2005, but thanks to our system of justice, the subprime bubble was just a little frothy......yah!
I also wouldn't be surprised by a rally tomorrow, if only because there were probably a lot of shorts going into the weekend predicated on a complete meltdown.
Of course, the long-term path over the next several months is almost surely down.
If this doesn't implode the Yen I don't know what will. And how about that billion a day we need from foreign lenders to keep our deficit from exploding? Think China would rather invest in USD or SAR? Not to mention Saudi Princes. Hell, the ruble is a safer investment than the USD.
I believe we are seeing the climactic end of the USD as a key currency. Today. Right now.
So - when do we find out exactly what the Fed bought with the 30 billion? I'm sure it's the worst of the lot, and that the Fed will be forced to take it by JP Morgan when it (inevitably) goes bad.
Oh, and is there any way to find out who was playing in BSC default swaps last week? At this point I suspect a bear raid and that the need to close this deal quickly was at least partially to catch the raiders out and ruin them. If they levered up to buy those swaps - har har.
Old story/mystery: reward offered, like a big thanks!! What happened to FTC??
Dec. 30 (Bloomberg) -- Bear Stearns Cos., the biggest underwriter of mortgage-backed securities, was told by the U.S. Federal Trade Commission to provide data and documents in connection with a probe of home loans to risky borrowers.
Bear Stearns's EMC Mortgage Corp. unit, which buys and services home loans, received the demand following a Dec. 8 FTC resolution, according to a filing today with the Securities and Exchange Commission. The New York-based firm said EMC Mortgage is cooperating with the government's inquiry.
According to the filing, made by a mortgage trust set up by Bear Stearns, the order is part of a broader FTC investigation of the $1 trillion market for so-called sub-prime mortgages. It said the agency is trying to determine whether any lenders, brokers or companies that handle loan services such as payment collection violated consumer-protection laws.
This doesn't surprise me,'' said Kevin Weigel, who oversees $5 billion in sub-prime mortgage investments at Aegon USA Investment Management in Cedar Rapids, Iowa.It seems like regulators are throwing a net at a lot of people. Predatory lending has become a pretty high-profile issue.''
Peggy Twohig, an attorney in the FTC's Bureau of Consumer Protection, confirmed that the agency is investigating EMC Mortgage. She declined to comment further, saying FTC investigations are non-public.
Will be interesting to see if any BS insiders sold heavily in the last couple of months. My guess is that "Ace" Greenberg probably dumped his shares very quietly a while back. Bound to be lawsuits concerning insider activity.
Reports on Bear Stearns have deepened concern about the credit crisis,'' Tomochika Kitaoka, a strategist at Mizuho Securities Co., said in an interview with Bloomberg Television.In this situation, investors' attention is very likely to be directed at U.S. monetary policy as well as securities companies' earnings.''
Son of a.... I almost shorted bsc friday morning at 50 something. Damn work distracting me and gettting in the way. I was too pissed at DUG and SRS doing nothing to pull the trigger.
Its pretty surreal to watch something like this happen in real time. I can only wonder what the fall of rome was like. I have a feeling things are going to change for a lot of people before they even knew something was happening.
``It's hard to stimulate an economy when the currency is going down the tubes,'' said David Malpass, the chief economist at Bear Stearns & Co. The New York-based firm expects the dollar will fall to $1.60 per euro in 12 months
I close or way off in my understanding and if I was a Chase shareholder, should I be worried ?
MouseintheHouse
You are doing pretty well, for a newbie. The only thing you might have missed is Bear's role as a counterparty in the nebulous world of credit default swaps. Bear probably took the wrong side in highly leveraged bets between two parties. None of the money involved in these bets was all that real, until last week. Then, the counterparty to Bear's swaps, who had probably made a lot of money (JP Morgan?), started to get worried if Bear couldn't pay off.
But Bear isn't alone in taking these highly leveraged bets and betting wrong.
Does anyone know the answer to the 200B announced on Friday? Is the 30 B in addition to the previous 200 B annouced on Friday? I'll read the rest of the post to check.
As far as the Nikki, it is almost balanced out by the dollar fall.
We need more money damn it, what don't these people get out there? We need more money, can I make it any clearer, do I have to go on Tv and say we have all the presses running at hyper speed and that we are PRINTING more damn money!! We gave you money for a war in Iraq, we gave you money for The Ownership Society, we gave you a rebate once and now another check in the mail, we bailed banks, we cut a deal with Bear, we have new improved easy terms where banks can dump debt and get fresh money .....what the fu-- am I suppossed to do, print more money; Im doing that, whadyah want, yah want money, here, go spend it!
Re: "If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation. "
1st?
Too easy
1st of 680. Not bad
The $1 a share that was mentioned in the previous thread turned out to be a pretty good guess...
Bear Stearns deserved no better but still feel some pity for all the worker bees who trusted their bosses and held stock in their company.
$2 a share. That's pretty good. I though it might be $1 a share. This is much much better. I am deeply relieved and I am sure Joe What's his Name is too.
" The Fed has agreed to fund up to $30 billion of Bear Stearns less liquid assets."
taxpayers have agreed to fork over up to $30 billion to make good any of Bear Stearns assets that are currently worth less than face value.
So JPM buys a bank for $2billion (in stock) and the taxpayers fund the transaction for $30billion.
looks like the fed is putting the "L" back in LBO...
so much for sunday being a slow news day
WOW!
Gold up $9 since the announcement
Stock holders walloped. One big bank down, how many more to go?
The Depression will be Blogged.
Google has failed me. Where can I see gld/forex prices over the weekend?
All the rumors were true - the definitnely wanted this done before Japan opened. It must have been worse than we thought.
Fed will provide special financing in connection with this transaction.
WTF
They bought it for $250 miliions? Wasn't the skyscraper alone worth a billion?
Joe Lewis reportedly put about a billion into BSC. At $2 a share he'll get out with $22,106,926. What kind of return is that? I don't do reverse numbers. LOL.
Here is the link to the webcast
.
Nice music while we wait ...
I hope we get some good questions!
Best to all.
Now up $11
This doesn't look good. I thought everything was all fixed.
in the presentation materials it says the transaction will cost JPM $6 billion in integration costs, litigation reserves etc etc.
So the $2b is throwing the shareholders a bone.
$2 a share yeah right, JPM will go down big.
I have serious questions about the Federal Reserve committing massive amounts of cash to a financial institution without Congressional approval. If it works, they'll get away with it, but if it doesn't work and the Fed loses massive amounts of money on defaulted securities, Congress is going to have a very interesting conversation with the leadership of the Fed.
So gold is way up and so is the futures mkt?
I wanted to buy a few more gold coins, but the hub but the kibosh on it. I'll be saying I told you so, I think.
Lehman, it was nice knowing you.
question:
say a high-flying employee of the bank just got paid $1m bonus last year. I'm guessing they'd have to pay taxes on that, something like $300k? I'd also guess that it would be mostly stock. Lets say 90%.
So they've just paid $300k in taxes, have $100k cash, and their stock is now worth around $20k (lets assume $90 was their strike, which is where it was back in november).
So...you just LOST $180k.
is this right?? so the guys hit hardest are the guys who did BEST at Bear last year (the CEO?)!!
any thoughts?
Chart 3: JPM will provide management oversight from time of announcement.
I guess Bear's management now has the well-earned opportunity to go somewhere and have fun...somewhere else.
Dow futures in freefall:
Sorry. Page not found.
I enjoyed this from the slides:
"No material adverse change clause. JPM has customary protections"
I like watching Bloomberg Asia... the dude is super lethargic... he's kind of bored with the whole end of days thing... S&P futures down 13 points after being up 15... Bloomberg dude is yawning.
this reminds me very much of when BAC announced they were buying Countrywide - the markets rallied on that news as well and eventually sold off. We'll see what tomorrow brings but a strong rally wouldn't surprise me - neither would a big selloff....
"All circuits are busy . . . " would some of you please hang up! Or, failing that, please transcribe some of the call . . . thanks in advance.
(761 visitors online, a record?)
Roubini has called this with uncanny accuracy. I think he must have some mojo going too.
I am on the call waiting. I will post details ( I assume everyone else will also).
This music rocks!
Peripheral Visionary:
Pick it up on the web. It is easier.
I think the reason the number of visitors is so high is that this is the only prolific financial blog that has the story so far.
Bear bought at $270million....a fall from $4 billion market cap Friday.
Must be a lot of guys not getting any sleep tonight.
Gold up 19
"this is good for JPM shareholders"
this is creating "value" for shareholders!
They get the $1B of earnings, and we taxpayers take all the bad paper. Hoo-f*cking-ray.
"WASHINGTON, March 16 (Reuters) - U.S. Treasury Secretary Henry Paulson said on Sunday he was pleased with the deal for J.P. Morgan Chase & Co. (JPM.N: Quote, Profile, Research) to buy Bear Stearns (BSC.N: Quote, Profile, Research) and with the Federal Reserve's latest actions to enhance market stability."
Paulson says pleased with J.P. Morgan-Bear deal
| Reuters
$2 a share, and the Fed backs up the "less liquid" assets. Their freaking building is worth five times that.
This has gotten completely ridiculous.
"90 days to close"
dow cash 11810 and tumbling, s&p's 1269, gold 1017
Closing in 90 days? What happens between now and then?
Love the "No material adverse change clause." I wonder what could cause that to be invoked?
But this was supposed to create stability right?
"no MAC clause"
Whoops. My bad. No clause.
So after taking a $6 billion pre-tax charge for this deal it is only $1 billion accretive to JPM's earnings when fully integrated - and no doubt assuming the market returns to the salad day - and that aint happening anytime soon. Sounds like a crappy deal for JPM but better than the alternative of a BS meltdown....
About two minutes ago the June 08 Dow future was down 137 points.
Why would the shareholders vote for this?
Immediate JPM guarantee for all BSC and subsids transactions.
And what happens if there is more than $30B of bad paper?
"All Bear Stearns counterparties are now dealing with JPMorgan." CFO.
The deal is essentially closed already.
"WASHINGTON, March 16 (Reuters) - U.S. Treasury Secretary Henry Paulson said on Sunday he was pleased with the deal for J.P. Morgan Chase & Co. (JPM.N: Quote, Profile, Research) to buy Bear Stearns (BSC.N: Quote, Profile, Research) and with the Federal Reserve's latest actions to enhance market stability."
risk,
I would bet if you asked BSC shareholders about the stability of the market, they may disagree with "Henry".
"non recourse lending facility for $30 b from the Fed."
"uh uh uh uh uh uh...."
come back to the five and dime, jimmy cayne, jimmy cayne
I can't bare the pain in my sternum ... THIS IS THE BIG ONE ELIZABETH, I'M COMING TO JOIN YOU HONEY!
crispy&cole, wow. I heard that "no recourse to JPMorgan" on Fed $30B. WOW
"pass me the bong Mr Cayne" (just kidding)
meltdown man-
I only wish the employees well, no doubt this is terrible news for them.
The alternative would have ikely been far worse and I am very glad that this was worked out.
the $6 billion in integration costs are totally larded up.
This should cover multiple sins.
Jimmy Cayne must be sh*tfaced about now. Probably starting in on that 2nd bottle of Scotch.
786-- new records eclipse last fall!
I just knew Ace was bluffing when he said all was A.O.K.
New company name? Bear Chase
Wow. Markets are not liking this at all, now that it is clear that the printing presses are starting up.
Just wow.
I wonder if claxons are sounding in the Fed non-stop nowadays?
We're at Fedcon 1.
the six train may be a little empty Monday morning.
I normally enjoy news like this. Seeing these big investment bankers take it on the chin.
But tonight, I'm nervous. I have a bad feeling that we are TRULY entering the beginning of what's to come. Till now we've been knocking at the door.
Questions now - $30b nonrecourse. Thank you Fed. WTF!
sadly, not long Bear CDS...but on the plus side, not short either! Wow their are going to be some guys hurting in the credit markets tomorrow (and quite a few celebrating!).
Yes doom. Now we enter the house of Mr. Faust. Next stop--Hell.
That's $50/share for 'transaction costs'
They threw in the kitchen sink.
$2/share for the stock. Non cash, all stock deal.
Overnight study material:
The Stock Market Crash of 1929
Should be an interesting week...
BSC, out of business? "Ridiculous!"
Sorry, had to say that,,,
Nikkei about to pass the Dow...
What, no cash in the deal???
I thought JPM was in a "strong" liquidity position.
No mention yet if JPM will be assuming any Bear debt.
Listening to these guys, you'd think they are doing this deal for strategic reasons only.
797...... do I hear 800
No MAC clause.
Q - "will bsc still be in business" ?
A - "yes they are still in business, backed by JPM"
804....
Erm...backed by the FED would be more accurate.
JPM is now Bear
Bear is dead
Long live JPM
Would you like a Bear Chaser with that drink?
"30 b from the fed is to avoid a fire sale of assets"
Now I don't know which thread I saw it on, but I would like to know what the mini Dow and big Dow means too.
"Should be an interesting week..."
Absolutely the best reality show going. maybe should be called "Lost II."
Doom,
Welcome come on in the door is open.
Honey pass me some kindling.....I mean federal reserve notes.
Nikkei under 12K..... Good thing they announced before the opening bell out there. It could have been bad.
815....I still cant believe the no recourse
"$2 enough?"
"We'd be surprised if a better deal came along."
Wow.
Bailout, even if shareholders don't approve deal.
We have crossover. Nikkei is under the dow.
Whoa! NIKKEI down 319.83
"The BSC bond holders will NOT benefit"
Must say that I really feel bad for the long term employees of Bear Stearns. A colleague's of mine, his mother retired and had $50k in stock as of earlier this year (long term employee of the firm). We shouldn't celebrate this. Let us mourn its passing and prosecute those who created this situation. The management, the creators of the toxic debt instrumentsm, the hedge funds and anyone else involved...
Bailout, even if shareholders don't approve deal.
wow!
bondholders don't get guarantee until deal closes
this shrinks the supply of equityshares in the marketplace... that's bullish for stocks.
DJM08 broke support. Looks like down from here.
know what the mini Dow and big Dow means too.
lawyerliz | 03.16.08 - 8:25 pm
Mini Dow requires less leverage to trade.
Guesses on an emergency cut tomorrow?
And then another one on Tuesday as expected anyway.
I recall something similar not too long ago.
For bondholders, no guarantee now, but JPMorgan will assume the capital structure of Bear when the deal closes. I believe this means JPMorgan is responsible for all the debt.
are we going to break 1000 like gold?
CR-
my interpretation as well
856 ... rate cut on Tuesday? or will the Visa IPO keep everyone happy for one day?
"assets marked similar to JPM" LMFAO!! Why would he admit that.
840 visitors online. Will the count surpass the gold price?
JPM thinks they're done marking their assets to market. Hmmm...
Oops, Visa IPO is Wednesday, sorry.
Dollar falling like a rock we all just lost a lot of money.
i can haz rate cutz ples?
"in their a day and a half"
How the hell can they tell what is good in that short of a time??
USD in waterfall mode now vs. JPY. Below 98 last I checked. Fed cut discount rate .25 pts - I guess they didn't even want to wait for tomorrow morning. Some kind of bizarre attempt to stick save Asia and Europe, perhaps.
This shortened trading week is gonna be real interesting, to say the least.
Fed funds headed to zero by fall....
"And that's a pop fly to shallow right to end the inning.
As we go into the bottom of the 3rd it's the Bears 6 Bulls 1 with the bottom of the order coming up."
850
Gold up $14 since the announcement
And 850 Visitors online
What will this do for the mortgage rates? Risk spreads were shooting thru the roof. More of the same?
Are S&P and Moody still rating their debt as not junk?
Wonder if that changes?
" JPMorgan is responsible for all the debt "
Why would they go for a deal like that? Even at $2? Oh, the Fed is gonna ....
dollar getting pulverized 97.20 ye
Time to buy foreign treasuries.
risk capital, I doubt I can get 21% on one year Bear bonds tomorrow (like Friday)!
"Good risk controls."
"Similar to our own."
Tests have come back, the USA now has non-curable ZIRPes. Now even the Chinese won't sleep with us.
I hope at the end he says..."no more calls...let's get the F outta here"
Nikkei -408.
My hats off to all who shorted the big banks I myself was to afraid of an outright bailout. I stuck with goog,MHK,SKK,HOG. kodos
$/yen = 97.34
What will this do for the mortgage rates? Risk spreads were shooting thru the roof. More of the same?
doom | 03.16.08 - 8:32 pm
I'll bet they come down due to all the liquidity that's been added in the last 9 days.
hey doomer, I'm gonna have to change my name to doomest
Time to buy foreign treasuries = last week
mkt officially says fed has lost credibility - 96.90 yen now gold 1022
"s/h will approve this transaction"
Why? I thought BV was $80??
$1B of earnings ... $200M.
Offloading $30B of BSC's worst assets to the FED ... priceless!
Dear Fed Govmint: Please send me my massive $600 check TODAY, I can't wait until July. Need to invest in Euros now. Thank you for your assistance.
Nikkei down 3.11%
Too late doom. I'm already thinking of changing my 1st name from John to Moral.
ikkei down 407
Glad I stocked up on french wine last year.
Someone posted the other day that Bear's assets were valued roughly about 600B with about 30x leverage? Now it's sold for 0.26B! WTF! What about other IB's? What are the market values for those assets held by other IB's? Nuke portfolios are imploding.
CR-
I think many things will change in the morning. (:
sale for $236.2M what was the office building worth? Meaning the business was worth negative...
I have my checking account with Chase. Everyone has one with the FED.
dollar up against euro!
96.50, sterling also getting whacked -
BSC shareholder just asked what he gains cf. ch 11. "I vote against this deal!" LOL
Carlomagno writes:
BSC shareholder just asked what he gains cf. ch 11. "I vote against this deal!" LOL
JP Morgan, "Ok"
What will the long bond do?
And they told shareholder: "Go ask Bear Stearns." LOL
we need an updated CR recession severity forecast
long bond at 3.40% right now...rallying
oops, i mean 3.36%
Amazing. Bear Sterns sold at $2. If I was a foreigner I would be bailing on America. Jesus, this is Katrina. A disaster in the happening, the government of the US looking like a clown.
t-bond on a tear,up big
Jill writes:
Whoa! NIKKEI down 319.83
Try -430. Damn.
the government of the US looking like a clown
Uh...like where have you been dude?
Quotable:
"Ridiculous, totally ridiculous." - Former Bear Stearns CEO, Alan "Ace" Greenberg, addressing liquidity-crunch speculation, March 10
"We don't see any pressure on our liquidity, let alone a liquidity crisis." - Bear Stearns current CEO, Alan Schwartz, March 12
"We're like totally fucked." - Various Bear Stearns executives, 10 minutes ago
Glad I stocked up on french wine last year
I bought that hand-made Spanish Guitar I always wanted . . .
$80 book value, sold for $2....caller trying to reconcile
Bear Stearns execs- "pass the paper bag that holds the bottle."
Oh idoc where are you? I've got January '09 $5 bankruptcy puts on Annaly Capital, please let these guys crater tomorrow!
Futures turning down now ... it would have been worse with no deal.
March mini-Dow close to -200
JPM people keep reiterating how solid their balance sheet is...ominous.
Analyst from CS just asked: "Just to clarify, does bear Sterans own its building?" ROFLLMAO!!!
Nikkei down 400, mini dow falling, long bond up, hit contracts on ex Bear execs up
877
Over. That was interesting ... thanks to all!
Guess what, JPM has the largest exposure to Bear Stearns + $30 billion non recourse loan from the Fed = THIS IS A BAILOUT OF JPM BY THE FED ! ! !
886 online!
Can somone post the real time link for futures?
Analyst from CS just asked: "Just to clarify, does bear Sterans own its building?" ROFLLMAO!!!
Carlomagno | 03.16.08 - 8:41 pm
no. They refi'd it with an option arm.
WE SAVED THE BANKING SYSTEM !!!! 2 bad about the currency....
Haven't ever seen the dollar tank this fast against the Yen. USD are backed by the full faith and credit of, oops, I mean, are backed by subprime mortages now being held by the Fed. Oh.
THIS IS A BAILOUT OF JPM BY THE FED ! ! !
No shit
Sorry. Page not found.
http://www.nni.nikkei.co.jp/
Jill writes:
Haven't ever seen the dollar tank this fast against the Yen.
I have. 1994.
This was to save JPM. Otherwise why assume the liabilites and guarantee all trading activities immediately?
"WE SAVED THE BANKING SYSTEM !!!! "
Nice sentiment, but Round 1 isn't over yet.
Thanks Kevin.
THIS IS A BAILOUT OF JPM BY THE FED ! ! !
sheesh
Stock Futures on Bloomberg
This like a front row seat in the Roman Colisium for the Christians versus the Lions. Interesting but wondering who is next.
No MAC clause. Who does that???
4822 and crispy -
I believe you are correct, but JPM stock wont hold up.
mp
how is conjure, muttering darkly in the corner or cracking open a cold beer?
dow futures down 165
Sorry. Page not found.
Buy Depends stock should be going up due to new found customers at Wall St and the FED!!
INO.com Current Futures Trading Price Board - Intraday Prices, Charts, and Quotes for Futures and Commodities Markets
as real as 20min delayed gets
It seems the largest BSC shareholder is Willington Trust Bank. This can't be good for them.
02-14-08
Wilmington Trust FSB (Boston) 27,336,556 shares
873 viewers
Time to short Lehman. What is their market cap as of Friday? Should go for what, $2.50 by Wednesday?
We're all bailed out now...
o MAC clause...sounds like the many rich who get married without a prenup....gonna end up like Paul Mccartney
869
"No MAC clause. Who does that???"
JPM. The deal is going forward, regardless.
The shareholders have up to one year to approve. If they don't approve, it gets submitted to them again and again until they do. After one year, it's over. Ben figures the problem will be fixed by then.
Can the number of visitors here cross the GOLD price ? 1019$/Oz ? ;-0
Sure can...
its getting fugly.. JPM folks spoke rather crazily..theres no clarity only empty conviction
YEN will rock the boat
From now on, every Fed rescue will increase the panic, not lessen it.
You'd think bankruptcy would be better for the BSC shareholders. At least in that case they own the sacred cow of the whole deal--the BSC HQ building in Manhattan!
97 Yen to the dollar! Wheeeee!
Interesting Times writes:
We're all bailed out now...
Correct that...
It should read:
We're all bailing out now....
Andy, Conjure is in his Conjure Korner, cranking on Excel. And foaming at the mouth.
895 vistors
How about the Yen carry trade we use to hear about when the yen was breaking 110.
Must be unwinding nicely about now.
Greenspan just said this is the "The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war. It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities."
FT.com / Comment / Opinion - We will never have a perfect model of risk
But I thought he said everything was going to be OK?
From Yahoo BSC Analyst Opinions:
PRICE TARGET SUMMARY
Mean Target:\t94.50
Median Target:\t93.00
High Target:\t160.00
Low Target:\t35.00
No. of Brokers:\t12
Bwahahahahaha! Choke cough choke. Bwahahahaha!
Doom that is the real story. I wonder how much will be lost on the Yen carry trade alone?
See what happens when you have deadlines!
Re: The Federal Reserve, the Office of the Comptroller of the Currency (OCC) and other federal agencies have given all necessary approvals.
Amazing, if this would have been a drug company, FTC would have looked the other way on the data and said, get that stuff in the pharmacies, let's go!
** But wait a tic, what about FTC, I think they have to give a thumbs up, they have power!!!
Tomorrow, does the PPT/I-banking cabal save the stock market from a crash? Or, is pretending that 'all is well' over, now?
oh god...Greenspan is still allowed to speak? hey Alan, you worried about debt NOW!!! you boob?
"The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war"
Which is another way of saying since the Great Depression.
879..... WOW ! ! ! I leave for 4 hours and the place goes nuts.... What happened
LJ writes: "But I thought he said everything was going to be OK?"
-- Everything is great until 10 minutes before it crashes. Nice concept, what?
Yah, I be right again, yah, what does FTC have to say about this??
Welcome to the Bureau of Competition
FTC Bureau of Competition
The Federal Trade Commission's Bureau of Competition champions the rights of American consumers by promoting and protecting free and vigorous competition. The Bureau:
reviews mergers and acquisitions, and challenges those that would likely lead to higher prices, fewer choices, or less innovation;
Yah, this gets into my antitrust bitching, yah!
Mr Cayne, how'd that bridge tourniquet - er, I mean tournament - go this weekend? Toke that one up to experience I guess. I mean, like dude, what's to do? Big inhalation sound.
Greenspan just said this is the "The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war. It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities."
Greenspan needs to shut up and go away.
Every time he pontificates I lose money!
Bear Chase
nice
Where's O-Joe and Sabastian? With 865 people here, surely they must be tuning in.
Come out, come out, where ever you are.
Come and get it - economic justice is served!
So... still too big to fall? Technically was this a fall? Nah... it was "saved" at the last minute at $2 a share.
Nothing to see here folks. No IB has failed yet... please move along.
And Misean?
Where are you!
Yen has been rocketing up. Big players or CBs?
Greenspan watches someone else clean up the mess he helped to create. He's like a college student who trashes a house with his buddies during a big party....and then watches everyone in the neighborhood clean up the place the next morning.
"Wow! You guys have a lot of work to do!"
Seb capitulated the other day... He's off the hook....
another reason to drink lots of green beer tomorrow......drink the troubles away.
The Conjure Clock has been ringing so loud over the last week or so it just broke my office windows.
I wonder if OJ and Seb went long on BS due to it being oversold?
(1) I was kind of rooting for BK, so the judge could take back recent bonuses
(2) Love "Bear Chase"
(3) I really hope nobody keeps all their retirement in their employer's stock anymore after Enro
Hi guys,
I'm kinda a financial newbie (and by 'kinda' I mean 'totally'). I'm a fan of this site and learning a lot, but want to make sure I understand what's going on, because it seems pretty dire to me.
This is my understanding: You have a respected bank (Bear Stearns), investing in these mortgage securities that are turning out to be junk, and they're no longer able to hide that their assets are pretty much worthless.
They're about to go bankrupt, but that would damage the economy and make it clear that everyone else's securities were junk too, so the federal government rides to the rescue and convinces another bank to bail Bear Stearns out, hoping to stop the panic. Bear Stearns, meanwhile, is so worthless, that the Fed has to sweeten the pot, so to speak, to even get Chase to agree to the deal.
Chase agrees to buy Stearns for less than its materials assets (such as the building) is worth, which to me means that Bear Stearns was in extremely bad shape, has a lot of debt and is pretty much a financial albatross to anyone who would buy it. Am I close or way off in my understanding and if I was a Chase shareholder, should I be worried ?
I'm not sure I understand the worry about what the shareholders may say in this particular case. If they don't like $2, what option do they have? Would they prefer $0?
I'd be surprised if Bear's executives didn't face personal suits from securities lawyers starting Monday morning, featuring snarky quotes from the last week. Not sure how that impacts whatever price should be paid for Bear today.
Tommorow at 6:25 am (west coast) there will be some announcement if the futures hit the fan - ZIRP!
Well, giacutter, now you can't say you don't know what time it is.
Where will the yen peak? Doesn't 80 feel like a hard limit? I mean, Kids at Burger King in Tokyo make Y800+/hr.
Yen now at 96.91......... Where's the bottom?
Japanese Yen - Currency Charts
Jimmy Cayne won't be able to afford a plane ticket after this. He probably doubled up on Friday.
Sniff........sniff......
I smell panic.
BTW....I love the blase Bloomberg anchor, too. That guy rocks.
Peter Schiff, where are you???.
MouseintheHouse - almost. This is a bail out of JPM.
They were going to suffer significantly if BSC failed.
JPM is now on the hook for all the bad debts. Minus $30 Billion gift from US citizens and corporations
This is the end.... my friend.....the end
Jim Morrison was refering to this moment.
Mouse -
I am quite the newbie too, but I will try. BS was worse than just worthless. It had liabilities that can't begin to be measured. The Fed paid JPM to take the ticking time bomb - a bunch up front and probably some guarantees we don't know about.
please stop saying they are buying for less than stupid building!!!!!! its makes you look wildly ignorant to all that have 2 min of fin analysis....there are 100s of billions of LIABILITIES to be assumed here. the 2 bucks is a token to be used for consumation of the deal....in actuality, the stock is a whipeout and the 80 BILLION of unsecured bonds are deeply impaired!!!!
Sorry, i dont normally comment, but those statements got too fcking stupid to let pass.....
mp
thanks, when conjure is my meltdown indicator. Nice conjure....
Just the beginning downfall of Wall St crooks aided and abetted by policies of Greenspan, The Fed, the inept and incompetent Bush admin and their pathetic cronies.
America please make sure and thank these asshats for this financial mess because you'll be paying for it for years to come !
hy guy Thanks.
$2 a share was a gift... wonder why it wasn't $ 0.01 ?
Maybe it's Wallstreet's respect for dead or something.
Kinda like pouring a bottle of nice single malt scotch on a good buddy's grave.
I sure am glad the FED is strong on the dollar. Paulson this morning was a wonderful look at "Who are you going to trust me or your lying eyes" He really said nothing. The emperors were partying while Rome burned.
hy
got to disagree with you on those bonds. Anybody that bot them on Friday is going to make out like a bandit.
They will be JPM bonds in 90 days or so.
How many (soon to be former) BSC executives will be getting margin calls on their McMansions and McPenthouses come Monday morning ?
1270 not broken much....
i'm as Bearish as most, if not more... but i'm leaning to buy the open.
RayOnTheFarm, all of them.
The $2/share price was a token to the loyal worker bees who own 33% of BSC.
Just checked the emperors club website - they no longer extend credit to BSC executives, cashiers checks up front.
It was $2 because of this :
"$2 dollarssssss"
"Sorry Jimmy, I dont have a dime."
"Didnt ask for a dime - $2 dollars"
The movie : Better Off Dead.
How fitting.
Tanta/ CR HELP!!
Ok, this goes way back for me folks!
Several years ago, like December 2005, FTC was investigating Bear Stearns in regard to EMC Mortgage:
Re: A Bear Stearns (BSC - Cramer's Take - Stockpickr) unit is coming under government scrutiny in a probe of residential lending to risky borrowers.
The investment bank's EMC Mortgage unit received a request for documents from the Federal Trade Commission to see whether it violated consumer protection laws, according to The Associated Press.
The request follows a Dec. 8 resolution by the FTC authorizing investigations into subprime lenders, loan servicers and brokers.
Bear Stearns disclosed the inquiry in a regulatory filing by a mortgage trust it set up. It said it's cooperating with the investigation.
I researched my anus off and never found a resolution to that case, it was dropped...I guess, but does anyone here recall anything about that? I find it interesting that FTC used to have power before The Bush Coup, and for some reason, this was taken off the front burner and forgotten. needless to say, FTC was on the right track with subprime corruption in 2005, but thanks to our system of justice, the subprime bubble was just a little frothy......yah!
Gold up $23.30
Visitors down to 800
Nothing left to see till tomorrow morning.
I also wouldn't be surprised by a rally tomorrow, if only because there were probably a lot of shorts going into the weekend predicated on a complete meltdown.
Of course, the long-term path over the next several months is almost surely down.
GREG
Seems $/yen off the bottom at least for now. Are your rates streaming. I use fxstreet.
Euro still bouncing
Heir to J. Peirpont Morgan apparently dies while choking on bone from bear carcass while dining Sunday night.
Story at 11.
It will be interesting to see how the pundits compare the Fed's methods to the Bank of England's bail out of Northern Rock
ESM8 if doesn't break 1270..then short term buy, i guess
If this doesn't implode the Yen I don't know what will. And how about that billion a day we need from foreign lenders to keep our deficit from exploding? Think China would rather invest in USD or SAR? Not to mention Saudi Princes. Hell, the ruble is a safer investment than the USD.
I believe we are seeing the climactic end of the USD as a key currency. Today. Right now.
So - when do we find out exactly what the Fed bought with the 30 billion? I'm sure it's the worst of the lot, and that the Fed will be forced to take it by JP Morgan when it (inevitably) goes bad.
Oh, and is there any way to find out who was playing in BSC default swaps last week? At this point I suspect a bear raid and that the need to close this deal quickly was at least partially to catch the raiders out and ruin them. If they levered up to buy those swaps - har har.
Who would you rather be right now:
Ace or Eliot?
It's two dollars in JPM STOCK..not cash.
Old story/mystery: reward offered, like a big thanks!! What happened to FTC??
Dec. 30 (Bloomberg) -- Bear Stearns Cos., the biggest underwriter of mortgage-backed securities, was told by the U.S. Federal Trade Commission to provide data and documents in connection with a probe of home loans to risky borrowers.
Bear Stearns's EMC Mortgage Corp. unit, which buys and services home loans, received the demand following a Dec. 8 FTC resolution, according to a filing today with the Securities and Exchange Commission. The New York-based firm said EMC Mortgage is cooperating with the government's inquiry.
According to the filing, made by a mortgage trust set up by Bear Stearns, the order is part of a broader FTC investigation of the $1 trillion market for so-called sub-prime mortgages. It said the agency is trying to determine whether any lenders, brokers or companies that handle loan services such as payment collection violated consumer-protection laws.
This doesn't surprise me,'' said Kevin Weigel, who oversees $5 billion in sub-prime mortgage investments at Aegon USA Investment Management in Cedar Rapids, Iowa.It seems like regulators are throwing a net at a lot of people. Predatory lending has become a pretty high-profile issue.''
Peggy Twohig, an attorney in the FTC's Bureau of Consumer Protection, confirmed that the agency is investigating EMC Mortgage. She declined to comment further, saying FTC investigations are non-public.
Will be interesting to see if any BS insiders sold heavily in the last couple of months. My guess is that "Ace" Greenberg probably dumped his shares very quietly a while back. Bound to be lawsuits concerning insider activity.
This story has legs IMO.
Jim
DenverKen - That's true... so with JPM going south, it could be the $0.01 as expected...
"Dollar pares losses" still on the Bloomberg crawl.
Reports on Bear Stearns have deepened concern about the credit crisis,'' Tomochika Kitaoka, a strategist at Mizuho Securities Co., said in an interview with Bloomberg Television.In this situation, investors' attention is very likely to be directed at U.S. monetary policy as well as securities companies' earnings.''
The Nikkei 225 Stock Average declined
Thanks everyone for the additional insight.
BSC is over. What about MS, LEH, MER, GS, etc.?
Down 20% tomorrow?
CR-
Expired
bluestatedon writes:
Who would you rather be right now:
Ace or Eliot?
Spitzer only lost a governorship. He's the son of billionaire New York landlord. What worries would he have?
Jail.
bloomberg asia now talking about jpm/dollar etc.
SC writes:
BSC is over. What about MS, LEH, MER, GS, etc.?
Traders are going to set their sites on a new victim and ride it to zero...then another, and another....
Can anyone post the Indian market TV link?
Jill | 03.16.08 - 8:44 pm | #
I think the Wall Street Journal site is more current.
Wsj Data center
analyst: we'll be at 1% rates before June
Indian CNBC:
404 Not Found
1$ by June and probably .25% by September..
gotta luv drudge....
DRUDGE REPORT 2010®
worthless
Son of a.... I almost shorted bsc friday morning at 50 something. Damn work distracting me and gettting in the way. I was too pissed at DUG and SRS doing nothing to pull the trigger.
Its pretty surreal to watch something like this happen in real time. I can only wonder what the fall of rome was like. I have a feeling things are going to change for a lot of people before they even knew something was happening.
analyst: we'll be at 1% rates before June
We'll be at $5 gasoline also
My pick is LEH next.
`Down the Tubes'
``It's hard to stimulate an economy when the currency is going down the tubes,'' said David Malpass, the chief economist at Bear Stearns & Co. The New York-based firm expects the dollar will fall to $1.60 per euro in 12 months
ahemmmmm
You are doing pretty well, for a newbie. The only thing you might have missed is Bear's role as a counterparty in the nebulous world of credit default swaps. Bear probably took the wrong side in highly leveraged bets between two parties. None of the money involved in these bets was all that real, until last week. Then, the counterparty to Bear's swaps, who had probably made a lot of money (JP Morgan?), started to get worried if Bear couldn't pay off.
But Bear isn't alone in taking these highly leveraged bets and betting wrong.
So . . . what happens to the S&P 500 now? Is it the S&P 499?
JPM was also the largest shareholder of Wilmington Trust, who owned 27,000,000 shares of BSC.
WL: Major Holders for WILMINGTON TRUST CP - Yahoo! Finance
Meltdown Man - Incestuous !
Gold now up $25.10
Visitors holding steady @ 803
Does anyone know the answer to the 200B announced on Friday? Is the 30 B in addition to the previous 200 B annouced on Friday? I'll read the rest of the post to check.
As far as the Nikki, it is almost balanced out by the dollar fall.
We need more money damn it, what don't these people get out there? We need more money, can I make it any clearer, do I have to go on Tv and say we have all the presses running at hyper speed and that we are PRINTING more damn money!! We gave you money for a war in Iraq, we gave you money for The Ownership Society, we gave you a rebate once and now another check in the mail, we bailed banks, we cut a deal with Bear, we have new improved easy terms where banks can dump debt and get fresh money .....what the fu-- am I suppossed to do, print more money; Im doing that, whadyah want, yah want money, here, go spend it!
Re: "If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation. "
Does this set the new market value for assets? More writedowns coming - S&P will need to go back to their Wrong B model and re tool a bit...
Inflation hits the Dollar store.
Interesting Times,
Nice work for JPM, have the Fed bail you AND clear a loss in one fell swoop.
Wilmington Trust's holdings reflects the holdings of the Dupont family and other private trust clients, not the bank itself.
USD has gone vertical, and not in a good direction.
Makes me wonder - at some point will dollar loss trigger intervention? Or is dollar strength last on people's minds?
Is talk of protecting a strong dollar merely a psych?
This is the end of the dollar; once it loses status as dominant reserve currency it won't get it back.
The Administration won't protect the dollar as they will need everything they can get to hold up the economy.