Bear Stearns Buyout

[Korgoth]

Not sure if this should be in politics or what, since its really just financial but...

The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., which was one of the largest global investment banks and securities trading and brokerage firms in the world. The firm's main businesses included capital markets (equities and fixed income), investment banking, wealth management, and prime brokerage clearing services.

Following a March 14, 2008 announcement that the firm required emergency financing from the Federal Reserve Bank of New York and JPMorgan Chase in order to avoid insolvency, Bear Stearns stock price suffered a precipitous decline, with its market capitalization dropping by 47%, from $57 per share to $30 per share by the end of the day. On March 16, the firm agreed to be acquired by JPMorgan Chase for $236 million (approximately $2 per share).[2] Among Bear Stearns' assets most desired by JPMorgan are its prime brokerage unit and the firm's midtown Manhattan office tower.[3]

I am just curious, bear stearns, one of the biggest financial institutions, goes down, JPMorgan Chase buys them out, basically buying a sinking ship... How can Chase afford to buy a failure, when they are in the same lending market? Before long, it seems like chase will own nearly everything in this country... then what? Does anyone know how to put this into simpler terms for me?

Also... Whats the economic impact like on my fellow forumites? Whats changed/changing for you? Anyone in risk of losing their home (i am)
Just curious, do you believe we are in recession?

 

[Jintor]

...you know, I thought this was a spam thread for a moment thar.

 

[Korgoth]

I just think its funny that JP Chase kick started the great depression himself in the 30's by scaring people into making a "run on the banks" and causing the infrastructure to collapse... Could they be doing it all over again? Since they are buying out losing lenders and taking on their debts, it appears on the surface that, our banks are weak, and Chase is strong. I hope this doesn't spread, but with Goldman Sachs set to post their losses, I think its only a matter of time before I see some of you guys in line at the soup kitchen.

 

[Krynn72]

I have no idea what this thread is about, but now I wanna go find some Bernstein Bears books.

 

[Bad^Hat]

I have no idea what this thread is about, but now I wanna go find some Bernstein Bears porn.

What he said.

 

[AiM]

I have no idea what this thread is about, but now I wanna go find some Bernstein Bears books.

bear stearns, one of the biggest financial institutions, goes down, JPMorgan Chase buys them out, basically buying a sinking ship... How can Chase afford to buy a failure, when they are in the same lending market?......do you believe we are in recession?

I think so, just look at the moves the US Fed's are pulling out in order to snap out of the funk. Things like shaving the discount rate by a whole percentage point and sending funds directly to not only the main banks / firms, but also the smaller non-primary "money making" banks / firms. Some of these measures haven't been used since the Great Depression.

I'm no expert in this but I think all the signs (and analysts) are predicting a recession to hit.

 

[Escaep]

British Billionaire Joseph Lewis lost $800 Million on the buyout.

http://online.wsj.com/article/SB120571021671940207.html?mod=yhoofront

 

[Seppo]

damn. he sucks.

 

[Krynn72]

Thats like loosing a $20 bill for the rest of us.

 

[Clavius]

Just curious, do you believe we are in recession?

Well if 'we' is the US then yes, you are. Its going eastgermany all the way in the next ten years.

 

[Krynn72]

You're the first person ive ever seen to have cooking instructions as his signature. Congratulations?

 

[Escaep]

Thats like loosing a $20 bill for the rest of us.

True. But still, jeez $800 Million.

 

[MaSter0fDarKneZz]

well lol if ur gonna borrow money at least make sure they pay you back!!! damn idiots

 

[<RJMC>]

so the USA will get poor? and the rest of the world will acompany it?

 

[Javert]

$2 a share for Bear is a steal.

They say the Bear Stearns building itself is worth $8 a share. Plus all the supplies and equipment, I'd say they're worth more than $10-11 a share. But buying Bear Stearns also means buying their name brand, people, and client list.

I also think we're already in a recession. Even if we haven't had the official definition fulfilled (two quarters of economic decline), people are clearly in a rut. I think at least we've hit Quarter 1.

Some other countries will also be affected in Europe, South America, and Asia (Japan and China). International stocks have also gone lower.

As for stocks I own: AT&T, Disney, and Gamestop. I want to buy: Apple and XTO Energy (Natural gas, not oil).