Bear Sterns

[lamboguy]

2 weeks ago price per share $80.00

friday march 14 $30


monday march 17#####buyout----happy st. patricks day you now get $2.00

thanks to the buyout from morgan stanley

[bigmack]

"The past week has been an incredibly difficult time for Bear Stearns," said Bear Stearns Chief Executive Alan Schwartz in a statement. "This represents the best outcome for all of our constituencies based upon the current circumstances."

$2/share is the best outcome from a stock that was trading at a high of $160 earlier this year? Sounds like $160 was loco.

[lamboguy]

if you listened to these bear sterns guys for the last month you would have thought you were in paradise. they are out and out lyars. they were able to suck more people into their stock and burried them. it was legal, but tell that to the guy that blew up his 401 k on this deal. in a nutshell that is what's wrong with the system. its rotted from the top down.

[dylbert]

2 weeks ago price per share $80.00

friday march 14 $30


monday march 17#####buyout----happy st. patricks day you now get $2.00

thanks to the buyout from morgan stanleyWish I had some $2 puts on BSC... several folks will get rich (or richer) tomorrow and some folks will be taking plunge of their lives as well. Capitalism is very efficient, zero-sum game.

[dylbert]

if you listened to these bear sterns guys for the last month you would have thought you were in paradise. they are out and out lyars. they were able to suck more people into their stock and burried them. it was legal, but tell that to the guy that blew up his 401 k on this deal. in a nutshell that is what's wrong with the system. its rotted from the top down.Your post stirred another thought. How come Sarbanes-Oxley Act(SOX) did not protect shareholders? You can't protect shareholders from bad business decisions!

If company's were as vigilant about removing bad officers, managers and employees as they are about controls, situations like Bear Stearns might never exist.

[ddog]

investment bank guys.
3.5+B Friday -- 250mil Sunday?
pretty good days work.
:eek:

How bad are the 30B of Bear "assets" that the FED had to guarantee to get JPM to do the deal?

Lots of big earners are about to be without a job and maybe without much net worth if they had a bunch of Bear stock still.

This is the beauty of leveraged debt when the underlying isn't worth a dime.

Not a good way to run a business, especially a middle-man kind of deal.
Once this stuff is over I hope there are some regs passed as to what these nutjobs can "structure".
If you have to lever 30-1 to make any money then don't allow them.

no sane person would let his 401k or any money one cared about be sunk into a common stock like this thing.
How many more flashing red lights did you need to see?


there is no Fed backing of this kind of business other than the too big to die side of the business.

this is GOOD news, however hard it is on those who stupidly keep money tied up in stocks like this with huge leverage on their books in this market.

The sooner the "smoke" comes out of these "banks" the better.
Then we can start from a solid base.
There's going to be another one or two like this and a bunch of little banks around the country that fail.

not sure overseas.

Funny that S&P had just come out a few days ago saying don't worry be happy most all the bad writedowns are behind us.


What about the British dude that went into that mess for about 6% of the stock a couple of weeks(?) ago.

Now THAT's a haircut.

I couldn't figure out when I heard why the guy would come in, but then I am not a Billionaire , either.
:lol:

[Gibbon]

Bear Sterns is essentially bankrupt. However, does have substantial assets.
Latest, JP Morgan Chase will buy all assets including corporate headquarters for 2.2 billion. Treasury secretary Paulson working all day Sunday on rescue plan. May happen before opening bell tomorrow.

[ddog]

they have already done it as i understand.
the credit side/ brokerage biz and equipment + a nice building is all they had left.

Nice office space though.
Maybe their poor employess can live in it until they find new digs.

[Valuist]

There's been talk for several months about severe problems at BSC. I seriously had thought about shorting it; Cramer had to come on and say that it was a likely buyout candidate and I backed off. Not that he is to always be believed but takeover rumors are enough to keep me from the short side. I guess he was right......but he was thinking around $100/share, not $2.

[Gibbon]

Very same happenings during those rolling blackout in Calif. caused by Enron and other energy traders. Lying sacks of thieves insisting all is well.

Rating agencies Moody's, Standard and Poors, A.M. Best, Weiss Ratings Inc., etc... useless bastards!

Does give one pause – we can debate was the horse a length or two off the pace but wall street data are a collection of outright lies, fabrication and deception.

[Gibbon]

Great book how real wall street works...

Stephen T. McClellan authored Full of Bull (http://www.amazon.com/Full-Bull-Street-Money-Market/dp/013236011X/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1205731460&sr=1-1): Do What Wall Street Does, Not What It Says, To Make Money in the Market.

[PaceAdvantage]

It's JP Morgan, not Morgan Stanley who is buying BSC, and they're paying a mere $270 million for the company, not 2.2 billion.

This stock went from about $55/share to $30/share in a mere 30 minutes Friday, which is about where it closed. Now it's worth $2.

Index futures are currently pointing to a 200 point drop in the Dow at the open later this morning, as the S&P futures are currently down 24 points in overnight electronic trading.

Think of all the really, really smart folks who worked for BSC. We're talking about one of the most elite investment banking firms in the world. And now they're SMOKED.

Holy Shit!

[Tom]

BSC stock or a show ticket on War Pass?
Hmmmmm?
Decisons, decisions.

[Gibbon]

It's JP Morgan, not Morgan Stanley .... mere $270 million for the company, not 2.2 billion. No one in this thread said otherwise. The proposed figure was an early estimate. Current figure is based on all known factors.

Think of all the really, really smart folks who worked for BSC. We're talking about one of the most elite investment banking firms in the world. And now they're SMOKED. Holy Shit! Appears to be a correlation with brains and corruption. %$&! them ALL. These very same mind set brought down conservative blue bloods Solomon brothers and Bankers Trust.
%$&! them ALL.

[Tom]

I hate to say it, but the whole financial industry appears to need a lot stronger regulation.

There are just too many fools, thieves and crooks sitting at those big desks.

[Gibbon]

We may be forced to reinstate the Glass-Steagall (http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act) Act.
Quote of the day from Treasury Sec. Paulson “We favor a strong dollar.”

[46zilzal]

I always bend over with laughter when the "elite" tell me that the stock market is much different than wagering on the nags.

[chickenhead]

it's MUCH easier to make money in the stock market.

[PaceAdvantage]

it's MUCH easier to make money in the stock market.I agree 1000%

[chickenhead]

my man hussman breaks down the "is this a bailout?" q.

http://www.hussmanfunds.com/wmc/wmc080317.htm

This distinction between liquidity and solvency is badly reported and widely misunderstood. A few economists, particularly Nouriel Roubini, have emphasized the difference, but by and large, the phrase "Fed intervention" is heard by investors as "Fed bailout." The essential fact is that the Fed's provision of short-term (generally 28-day) liquidity does not represent a “bailout,” and the Fed is emphatically not taking the default risk of the mortgage market onto itself.

To see this, keep in mind that the Fed works through “primary dealers” – generally large U.S. banks that are members of the Federal Reserve system. When the Fed enters a repurchase agreement, or other type of “lending facility,” it provides a certain amount of short-term funds to those dealers, in return for collateral in the form of Treasury securities, and more recently, investment-grade (cough) mortgage securities. But this is the important part – the dealers agree to “repurchase” those securities back from the Fed at the original price, plus interest.

As a result, even if the mortgage securities used as collateral go into default while they are in the hands of the Fed, the primary dealer still has to repurchase them from the Fed after 28 days, at the original price plus interest. The Fed does not take on the risk of default for the collateral, since it will get paid back as long as the member bank makes good. Instead, the only risk that the Fed takes on is the possibility that the primary dealer itself – a major U.S. bank – will go bankrupt during the 28-day period that the Fed holds the collateral. While the risk of a major bank failure has increased in recent months, the vast majority of the securities briefly held by the Fed will remain the problem of the institutions that owned them in the first place.

[PaceAdvantage]

If the Fed were bailing them out, BSC wouldn't be worth $4.85 today....

From $55 to $4.85 in two days....some bailout....

But hey, at least they're more valuable than Magna.....:lol:

[wonatthewire1]

investment bank guys.
3.5+B Friday -- 250mil Sunday?
pretty good days work.
:eek:

How bad are the 30B of Bear "assets" that the FED had to guarantee to get JPM to do the deal?

Lots of big earners are about to be without a job and maybe without much net worth if they had a bunch of Bear stock still.

This is the beauty of leveraged debt when the underlying isn't worth a dime.

Not a good way to run a business, especially a middle-man kind of deal.
Once this stuff is over I hope there are some regs passed as to what these nutjobs can "structure".
If you have to lever 30-1 to make any money then don't allow them.

no sane person would let his 401k or any money one cared about be sunk into a common stock like this thing.
How many more flashing red lights did you need to see?


there is no Fed backing of this kind of business other than the too big to die side of the business.

this is GOOD news, however hard it is on those who stupidly keep money tied up in stocks like this with huge leverage on their books in this market.

The sooner the "smoke" comes out of these "banks" the better.
Then we can start from a solid base.
There's going to be another one or two like this and a bunch of little banks around the country that fail.

not sure overseas.

Funny that S&P had just come out a few days ago saying don't worry be happy most all the bad writedowns are behind us.


What about the British dude that went into that mess for about 6% of the stock a couple of weeks(?) ago.

Now THAT's a haircut.

I couldn't figure out when I heard why the guy would come in, but then I am not a Billionaire , either.
:lol:

wait till the rest of the economy is valued out the same way - gonna find out that there is a lot of leverage with nothing holding it up

[Dick Schmidt]

P.A.


Don't think of this as a bailout, think of it as an excellent buying opportunity. At $4-5, this stock is way undervalued. What do you do if the whole world thinks the sky is falling and you find a good stock that's the victim of panic? Buy. I did.

Dick

"Like a midget at the urinal,
......I'm always on my toes!"

[wonatthewire1]

the dude is doing his side-stepping

who was pumping the well with all the cash?

http://news.yahoo.com/s/nm/20080317/bs_nm/economy_greenspan_dc

[bigmack]

There's something you don't see everyday. An 84% drop.

http://i165.photobucket.com/albums/u70/macktime/bs.jpg

Lawsuits-A-GoGo

The complaint alleges the investment bank failed to disclose material adverse facts regarding its financial well-being, the potential consequences of its " substantial entrenchment in the subprime mortgage market," that the firm's stock price was artificially inflated and heavy investment of retirement savings in company stock would inevitably result in significant losses to the plan and its participants.

[JustMissed]

P.A.


Don't think of this as a bailout, think of it as an excellent buying opportunity. At $4-5, this stock is way undervalued. What do you do if the whole world thinks the sky is falling and you find a good stock that's the victim of panic? Buy. I did.

Dick

"Like a midget at the urinal,
......I'm always on my toes!"

Why did you pay $4.85 or whatever for BSC.

It only worth $2.

What am I missing?


JM

[dutchboy]

What happened to the days when the trading in a company stock would be halted/stopped for a period of time when something likes this happens?I always thought that if a stock price drops over a certain % trading is halted. It is really amazing to look at the graph on Yahoo finance. Bear Stearns price on tuesday mar 11th was $70 prox. 4 trading days later it is basically worthless.

[IBCNU]

I always bend over with laughter when the "elite" tell me that the stock market is much different than wagering on the nags.

You can stop laughing. Every cent in our great country is generated by the PRIVATE sector. Our government produces nothing. It only taxes, regulates, and redistributes. (and grows). The Companies in our stock and credit markets are capitalized by going to its citizens who can in turn participate in future growth, dishonesty notwithstanding. Gambling creates risk where none existed. The markets TRANSFER risk from those holding it to those willing to take it for a premium. "Price discovery" "Liquidity" etc.

Consider the farmer who wants to lock in a secific delivery price for his wheat 3 months from now. He can sell a future to someone willing to assume that risk or "make a market". In return, he hopes to profit. If this sits against your grain then maybe we should just go ahead and nationalize everything and have that experiment fail for the seventh time in history.

[DJofSD]

It only worth $2.

$2/share is what is being offered by JP Morgan. What they pay and what they realize in the acquisition are two different kettle of fish.

Certainly the so called value bettor understands the difference.

[PaceAdvantage]

What happened to the days when the trading in a company stock would be halted/stopped for a period of time when something likes this happens?I always thought that if a stock price drops over a certain % trading is halted. It is really amazing to look at the graph on Yahoo finance. Bear Stearns price on tuesday mar 11th was $70 prox. 4 trading days later it is basically worthless.Usually, stocks are halted pending news or rumors, not because they drop a certain %.

Stock indexes and stock index futures, like the DOW and S&P 500 will be halted for a period of time if they drop a certain %.....it's called circuit breakers....not sure what the current %s are, but you can easily look them up....

[DJofSD]

NYSE/Euronext circuit breaker (http://www.nyse.com/press/circuit_breakers.html) rules. I believe individual stocks can be suspended (or not) at the discretion of the exchange.

[JustMissed]

$2/share is what is being offered by JP Morgan. What they pay and what they realize in the acquisition are two different kettle of fish.

Certainly the so called value bettor understands the difference.


"From Standard & Poor's Equity Research
Investing
JPMorgan Buys Bear on the Cheap
linkedin connections JP Morgan Chase (JPM) agrees to acquire Bear Stearns (BSC) for $2.00 per share, or 0.05473 JPM share per BSC share. Effective immediately, JPM is guaranteeing the trading obligations of BSC and its subsidiaries and is providing management oversight for its operations. Other than shareholder approval, the closing is not subject to any material conditions. The deal is expected to close by end of the second quarter. The Federal Reserve, the Office of the Comptroller of the Currency and other federal agencies have given all necessary approvals.[EndQuote]

Looks like a stock swap to me.

Maybe the Bear Stearns shareholders will hold out till it is worth 5 cents. :D

JM

[Valuist]

THere may be a play here: short JP Morgan. JPM will inherit a ton of headaches, and many lawsuits.

[Tom]

What's the bottom line here?
How much did it cost the taxpayers?

[Marshall Bennett]

Who knows . Who's next ? Sounds like any bank or financial institution has an open invitation to borrow what it needs from the govt. to survive . The way I see it .. they'll be borrowing from you and me . :confused:

[chickenhead]

If JPMorgan goes bankrupt this will cost us something. Otherwise, not. This is basically why they (The Fed) were created in the first place, to do this sort of thing.

[Boris]

THere may be a play here: short JP Morgan. JPM will inherit a ton of headaches, and many lawsuits.


JPM is run by a very smart guy. I would not bet against him.

[DJofSD]

The cost to the taxpayer will be the additional impacts to the economy caused by the Fed printing more money. Certainly a cause for an increase in inflation. If there is a single boost to the increasing price of gold, it will be as a hedge against inflation.

[Valuist]

Diamond is one of the top CEOs. Citigroup went down the tubes after he left. Even if I don't short it, I definitely won't buy JPM. Goldman might be worth considering and it will be interesting to see what they come out with tomorrow.

[ddog]

What's the bottom line here?
How much did it cost the taxpayers?

30B for starters.
JPm will pick off the worst junk and hand it to US.

JPm and nobody could possibly know what they are getting into for sure, so I don't blame them for wanting the 30B backing to take over the deal.

However, if this stopped a huge run from Asian markets,etc. that would have excelerated here on Monday then it may have been cheap insurance.


if the Bear shareholders don't kill the deal then JPM has gotten the deal of the century on this thing,even though I had heard that JPM wasn't begging to buy them.

[ddog]

If JPMorgan goes bankrupt this will cost us something. Otherwise, not. This is basically why they (The Fed) were created in the first place, to do this sort of thing.

One thing is certain(?), this will not happen in the next 10 years.
we are down 30B on the deal.
the junk that JPM will peel off Bear will never be and is not worth anything.

that's kind of a goodwill fee from US to them to do the deal.

Nobody else that was on the calls was in a strong enough position to do the deal.
Bofa, etc.
that in itself is not the best of news.

[highnote]

Why did you pay $4.85 or whatever for BSC.

It only worth $2.

What am I missing?


JM

A friend emailed me today and wrote that Bear Stearn was bought by JPM for $2. Building is worth $8. So JPM bought for minus $6 per share.

Here are 3 different takes. I like the first one by John Mauldin the best... but the truth is probably someone in between.

By the way, where is Elliot Spitzer when you need him to steamroll some "expletive" heads. :rolleyes:

http://www.investorsinsight.com:80/otb_va_print.aspx?EditionID=667

http://agonist.org/stirling_newberry/20080317/rattling_apart_captain_carnage_and_the_bear

http://www.fool.com/m.asp?i=2484611&u=178733209

[riskman]

I hate to say it, but the whole financial industry appears to need a lot stronger regulation.

There are just too many fools, thieves and crooks sitting at those big desks.

Tom--It will happen---regulation and these so called "financial instruments" should be labeled "smoke and mirrors." Maybe the Fed should just let the chips fall where they may--let the frauds that caused the crisis suffer --- but it will not happen. Bear Sterns was a major whore pushing the biggest load of crap into their two hedge funds that were one of the first to go bust in this current sordid mess. Bear Sterns should have been allowed to fail as a lesson to the other pimps on the street.

[bigmack]

Tom--It will happen---regulation and these so called "financial instruments" should be labeled "smoke and mirrors." Maybe the Fed should just let the chips fall where they may--let the frauds that caused the crisis suffer --- but it will not happen. Bear Sterns was a major whore pushing the biggest load of crap into their two hedge funds that were one of the first to go bust in this current sordid mess. Bear Sterns should have been allowed to fail as a lesson to the other pimps on the street.
I was just gonna type that very thing. :cool:

Well said:ThmbUp::ThmbUp:

[PaceAdvantage]

Maybe it's me, but going from $55 to $4 in less than two trading days sounds like a failure to me....

Yeah, they're getting bought by JPMC, but seriously, most of the BSC guys are going to lose their jobs, and the company will be no more. They're gone...failed...SMOKED....is this really a bailout? It doesn't smell like a bailout to me....

[riskman]

The way the deal went down, it looks like JP really didn’t want to do it at first blush. Bear’s black-hole balance sheet was just too scary. Who knew what further dangers lurked?
No problem, said the Fed. What if we cover your balance sheet risk? If you (JP Morgan) do your patriotic duty and buy this smoking wreck of a business, we’ll throw in $30 billion worth of government-backed protection. Maybe more if you need it.

And by the way, we’ll push through an emergency rate cut -- on a Sunday, no less -- just to seal the deal. And we’ll start lending money to brokers on the same terms as the banks… a historic shift! Oh, and we’ll even slash rates again later this week. What else could you want, a kitchen sink?

The language is paraphrased, but the promises are real.

Who’s Really Buying?

In light of the favorable deal points, the question has to be asked: Who is really and truly buying Bear Stearns here? Is it JP Morgan… or is it the US government? The government (by way of the Fed) is the one who moved heaven and earth to get this deal done, and the government is the one taking on Bear’s balance sheet risk. (JP Morgan has been aggressive in pointing this out.) This smells like nationalization( could not think of a better word)) one step removed.

[skate]

THere may be a play here: short JP Morgan. JPM will inherit a ton of headaches, and many lawsuits.

they have a cover on the "Lawsuits", and the headaches are from the party.

[cmoore]

The stock market is nothing but white collar crime at it's best.


I hate to say it, but the whole financial industry appears to need a lot stronger regulation.

There are just too many fools, thieves and crooks sitting at those big desks.

[skate]

Ok, now what?

[dylbert]

If the Fed were bailing them out, BSC wouldn't be worth $4.85 today....

From $55 to $4.85 in two days....some bailout....

But hey, at least they're more valuable than Magna.....:lol:Do you think FED would bankroll JPM to "acquire" MECA? :lol:

Alright, back on topic -- BSC shareholders pleading that offer is undervalued. Any other suitors lining up? Nope. Case closed. Take your losses and move on.

[ddog]

The way the deal went down, it looks like JP really didn’t want to do it at first blush. Bear’s black-hole balance sheet was just too scary. Who knew what further dangers lurked?
No problem, said the Fed. What if we cover your balance sheet risk? If you (JP Morgan) do your patriotic duty and buy this smoking wreck of a business, we’ll throw in $30 billion worth of government-backed protection. Maybe more if you need it.

And by the way, we’ll push through an emergency rate cut -- on a Sunday, no less -- just to seal the deal. And we’ll start lending money to brokers on the same terms as the banks… a historic shift! Oh, and we’ll even slash rates again later this week. What else could you want, a kitchen sink?

The language is paraphrased, but the promises are real.

Who’s Really Buying?

In light of the favorable deal points, the question has to be asked: Who is really and truly buying Bear Stearns here? Is it JP Morgan… or is it the US government? The government (by way of the Fed) is the one who moved heaven and earth to get this deal done, and the government is the one taking on Bear’s balance sheet risk. (JP Morgan has been aggressive in pointing this out.) This smells like nationalization( could not think of a better word)) one step removed.

wait until you see what they do to the housing "market"!

by the time Franker-nake-losi-Johnson are done the gvt will have bailed out or bought up everthing in sight that doesn't have someone sitting in the house today including the land it sits on.

it will be a boondoggle of historic scope.

May be time to get back in the "home sweet home " business!

[pandy]

I hate to say it, but the whole financial industry appears to need a lot stronger regulation.

There are just too many fools, thieves and crooks sitting at those big desks.

I agree.

[pandy]

2 weeks ago price per share $80.00

friday march 14 $30


monday march 17#####buyout----happy st. patricks day you now get $2.00

thanks to the buyout from morgan stanley

This deal orchestrated by the Fed could be a warning sign. For the Fed to get together on a Sunday to broker this bailout is a sign that they are worried about the banks, the economy, and a posssible panic selloff on Wall St, not to mention a run on the banks. Fortunately the earnings for two other brokerage firms came out this week and were better than expected, otherwise we'd be in trouble. But things could still fall apart. I don't see how anyone can be bullish right now, but I just watched Cramer and he says he thinks we may be at the bottom of the market, which shocked me. I see it going much lower.

[ddog]

my man hussman breaks down the "is this a bailout?" q.

http://www.hussmanfunds.com/wmc/wmc080317.htm


he has a couple of holes in here, one is that the Fed can work through primary but doesn't have to.

Jp was the conduit since the Bear didn't have a legal way to access anything and the Fed didn't want them to anway.
That is why the discount window is open to the others now.
Fed could have done this a week or two ago and Bear may have been able to keep afloat.

the 28day deal he is talking about, unless he has seen some info on the deal I have not seen is that 28 days is not set in stone and the Fed will never press JP on that.

I could be missing something on this part, but I suspect if you check back this time next year you will find that 30B or a large part is in the dumpster.

It was a bailout, just not of Bear. The Fed hopes it bailed out the whole rotten bunch of the inv bank boys.


Oh and by the way , now that we have opened up the window to the inv bank types , they must come under the major part of the comm bank rules now, in capitalization , disclosure , exec compensation and other regs.
That's the price they should have to pay to get the access to the easy paper.

[PaceAdvantage]

P.A.


Don't think of this as a bailout, think of it as an excellent buying opportunity. At $4-5, this stock is way undervalued. What do you do if the whole world thinks the sky is falling and you find a good stock that's the victim of panic? Buy. I did.

DickAnd you made a nice 20+% in one day....stock closed at $6.20, up $1.39 today....

[Gibbon]

....BSC guys are going to lose their jobs, and the company will be no more. They're gone...failed...SMOKED....is this really a bailout? It doesn't smell like a bailout to me All the Fed has done is merely monetized Wall Street's mistakes yet again. While leaving future generations of taxpayers with an even bigger tab to settle and higher future inflation to fight.

But there's just no time for such time honored economic pondering now, we're in the midst of a full-blown financial crisis. Damn the financial torpedoes, full speed ahead with the monetary printing press.

Dow down nearly 300pts. Some 'get it.'

[chickenhead]

I could be missing something on this part, but I suspect if you check back this time next year you will find that 30B or a large part is in the dumpster.

It was a bailout, just not of Bear. The Fed hopes it bailed out the whole rotten bunch of the inv bank boys..

The devil is entirely in the details. The Fed didn't buy Bears mortgage book I don't believe, they accepted it is collateral, to help fund the short term cash needs that JPM will need as Bear guarantuer. Everyone is acting as if that's the same thing. It's not. The intrinsic value of the collateral only becomes important when the person that owes the money can't pay you back. JPM. They didn't get Bear for free AND no liability. Without the liability, and with liquidity, Bear is still "worth" ~$84 a share.




Oh and by the way , now that we have opened up the window to the inv bank types , they must come under the major part of the comm bank rules now, in capitalization , disclosure , exec compensation and other regs.
That's the price they should have to pay to get the access to the easy paper.

I agree.

[Gibbon]

part 1 of 5 HlNsPQT1EgE

[robert99]

Gibbon,

Those videos could not make the message more simple or more powerful.

[Marshall Bennett]

Every time they cut interest rates the dollar gets weaker . They keep bailing out credit woes and making matters worse abroad . They're digging a deep hole .

[cmoore]

Bear Sterns has been bailed out because if they filed for bankruptcy there books would have to be exposed. All of there debt would be shown. They are one of the biggest naked shorting firms out there. They use the mortgage debacle as an excuse. Naked Shorting is on a rampage and the markets will crash if the SEC doesn't do something about it.

Definition of Nake Shorting:
The illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. But due to various loopholes in the rules and discrepancies between paper and electronic trading systems, naked shorting continues to happen.

While no exact system of measurement exists, most point to the level of trades that fail to deliver from the seller to the buyer within the mandatory three-day stock settlement period as evidence of naked shorting. Naked shorts may represent a major portion of these failed trades

Naked shorting is illegal because it allows manipulators a chance to force stock prices down without regard for normal stock supply/demand patterns.

[ddog]

The devil is entirely in the details. The Fed didn't buy Bears mortgage book I don't believe, they accepted it is collateral, to help fund the short term cash needs that JPM will need as Bear guarantuer. Everyone is acting as if that's the same thing. It's not. The intrinsic value of the collateral only becomes important when the person that owes the money can't pay you back. JPM. They didn't get Bear for free AND no liability. Without the liability, and with liquidity, Bear is still "worth" ~$84 a share.








I agree.

I think the MBS stuff, that junk was worthless, couldn't be sold for anything, so that 30B is backstopping that junk. Nobody wants it now, certainly not JPM, they can't sell it either.
JPM did essentially get a gurantee that whatever they find up to 30B , MBS, whatever they can hand off to the FED.
They will not have to pay that out to anyone.

I think 20-20B of that 30B will be where that bad junk goes to die.
when calls come in for the cash that those securities were backing, then JPM will shove that to the FED and get some nice clean FED paper, from the 30B, that they can sell to make those calls whole.

that's my take on it anyway.



They did not get it for free, the more I hear about the deal, it looks like the one group that's going to do well are the lawyers.

They are really only "worth" 2 bucks, unless the shareholder group can overturn the FED and Paulson and Bush, all of them signed off on the deal.

I say not likely to happen.

Keep in mind that the stock IS worth more than 2 bucks to the bear bondholders and JPM, who to a point could be picking up enough to freeze out the other shareholders to make sure the deal does get voted in.

So , I guess to some it is worth whatever it takes to make the intent of the 2 buck deal go through?

if that doesn't make any sense, I can understand THAT at least.

On another point, just heard that some London traders were trying to bear raid a big London bank out of business and spreading liquidty fear stories.
Major scandal in the press over there.

[ddog]

Bear Sterns has been bailed out because if they filed for bankruptcy there books would have to be exposed. All of there debt would be shown. They are one of the biggest naked shorting firms out there. They use the mortgage debacle as an excuse. Naked Shorting is on a rampage and the markets will crash if the SEC doesn't do something about it.

Definition of Nake Shorting:
The illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. But due to various loopholes in the rules and discrepancies between paper and electronic trading systems, naked shorting continues to happen.

While no exact system of measurement exists, most point to the level of trades that fail to deliver from the seller to the buyer within the mandatory three-day stock settlement period as evidence of naked shorting. Naked shorts may represent a major portion of these failed trades

Naked shorting is illegal because it allows manipulators a chance to force stock prices down without regard for normal stock supply/demand patterns.

That makes a lot of sense as it seems like a BIG someone was determined to kill those guys.
There had to be some other reason than just margin calls,etc.that would make the Bear people accept the 2 buck figure.

[DJofSD]

Bear Sterns has been bailed out ...

BSC is not being bailed out. If there's a company that's benefiting from the largess of the federal government it is JPMC. And even then, I'm not so sure.

Let's see what happens after day number 28. If it gets rolled over or extended in one manner or another, then I would agree it's a bail out.

However, not all parties have been heard from yet. And the stock is holding at $5+/shr. I don't think this is a done deal.

[Gibbon]

DJ,

I'm bankrupt with only one dollar in remaining total assets. Would you please lend me $30 on my collateral of one dollar. PA pledges to guarantee all your risk for 28 days at which time you take me over and pay ourself back the original loan.

Economics by Tony Soprano. But please, lets not call it a bailout. :bang:






________________________________________
Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it ~ Ronald Reagan

[ddog]

BSC is not being bailed out. If there's a company that's benefiting from the largess of the federal government it is JPMC. And even then, I'm not so sure.

Let's see what happens after day number 28. If it gets rolled over or extended in one manner or another, then I would agree it's a bail out.

However, not all parties have been heard from yet. And the stock is holding at $5+/shr. I don't think this is a done deal.


Bear JUST Bear was not bailed out, BUT the Bear creditors were most assuredly bailed out.

The Fed kicked in a 30B credit into JPM kitty.
Bear did NOT have the assets to pay to those creditors.
Those creditors were running for the exits at the thought of not getting paid by Bear. 0-nada.

So, that 30B is to cover the first set of creditors that want that money.
Those people have already been bailed out , as they were the next run waiting to happen if the Fed had not moved it now seems.
That's why they did it Sunday, the timing tells you a lot.


There will be nothing to roll, I expect. It has already or will be , as part of the deal, used as cushion by JPM.

This was like what Japan did I think.
There the gvt bailed out each bad actor and handed what was left of the bad actors paper along with a little loose change to the next "deep pockets" up the food chain.

Problem was that this strung out the pain over years and years instead of letting the bad junk/actors take the pain and get the system cleaned out quickly.

I am now firmly of the opinion that much more of this is to come and I would vote everytime to let them die via runs on the bank and only then see what was left over that no other entity would take and let the gvt sort that out.

No more white knight bailout to a preferred partner picked by the gvt.

what the heck is that but socailizing the downside via central planning.

maybe we should adopt the old hammer sickle and fly that over the FED.

[PaceAdvantage]

Naked Shorting is on a rampage and the markets will crash if the SEC doesn't do something about it. I remember hearing for years and years and years and years about the derivative crisis that was about to smash the markets, but never came....are you saying THIS is the 'who' I've been waiting for all these years?

Are you saying this is the giant derivative crisis all the chicken-littles have been crying about for at least ten years, but they've fooled us into thinking this is about bad bets on sub-prime mortgages?

[skate]

Ok ok ok, i'd like to make this point.

Not to many years ago (10 or 12), "sympathy" for those people not permitted to own their own house was "the cry", give these people a chance, let them buy a home, the American dream (bs).

Well, you gots it babe.

1999, was the last time we took controls from banks and LENDING (new ) firms.

Also, i'm not saying "we can't handle the situation". It's just another form of Liberalism that didn't work.

[Gibbon]

In some newly released documents Bear held 13 Trillion in mortgage based derivatives.
For perspective, total US GDP is 13 Trillion for year 2007.

PA, this is NOT even remotely amusing.

Bear Chairman Jimmy Cayne was at a bridge tournament in Detroit while the Fed was arranging the bailout package, which didn't help the perception that management wasn't paying enough attention to looming catastrophes....

[wonatthewire1]

I remember hearing for years and years and years and years about the derivative crisis that was about to smash the markets, but never came....are you saying THIS is the 'who' I've been waiting for all these years?

Are you saying this is the giant derivative crisis all the chicken-littles have been crying about for at least ten years, but they've fooled us into thinking this is about bad bets on sub-prime mortgages?


It is more like the great-great-great grandson of the original derivatives - now so far removed from their intended purpose that they are unrecognizable from the original "gene pool"

The idea of attempting to layer risk under a myriad structure of players to eliminate it has backfired - can't even begin to understand the implications but we are starting to see it now...

That's why they have those fancy MBA's from Duke, Columbia and Harvard - gotta think of some new stuff to make money off of...if the money is going to be worth anything (quick - exchange that!)

[cmoore]

I have to admit that I got one of those interest only loans. A one year ARM to be exact. It went from 4.2 to 7.7 in less then 2.5 years. Its dropping fast now. Fortunatley it will be under 6% within 6 months from now. But We bought a house that we could afford. Many of these people bought houses they couldn't afford if the interst rates went up and the banks knew that. They just saw thier money on the front end and rolled with it. Now it's catching up to these money hungry bastards. The buyers are to blame but the lenders are mostly to be blamed. They are in the business.



Ok ok ok, i'd like to make this point.

Not to many years ago (10 or 12), "sympathy" for those people not permitted to own their own house was "the cry", give these people a chance, let them buy a home, the American dream (bs).

Well, you gots it babe.

1999, was the last time we took controls from banks and LENDING (new ) firms.

Also, i'm not saying "we can't handle the situation". It's just another form of Liberalism that didn't work.

[Valuist]

I think Lehman Brothers could be the next BSC.

[skate]

I have to admit that I got one of those interest only loans. A one year ARM to be exact. It went from 4.2 to 7.7 in less then 2.5 years. Its dropping fast now. Fortunatley it will be under 6% within 6 months from now. But We bought a house that we could afford. Many of these people bought houses they couldn't afford if the interst rates went up and the banks knew that. They just saw thier money on the front end and rolled with it. Now it's catching up to these money hungry bastards. The buyers are to blame but the lenders are mostly to be blamed. They are in the business.


Well , ok, but you made the correct move, while others did not. So k do i feel sorry for them, or should they be better off by learning, chalk it up, it is very basic to learning.

Leverage is Over-Betting, leads to unwinding of Stability, becomes instability.
People are deceived, happens, Always.

Same thing at the track ,casino, same thing, should we give back the money.

i wouldn't call either side "money Hungry Bastards" and i can't blame either side. But i would ask the question, why were the controls removed? That's where the confusion comes from, that and Human nature, IMO.

[bigmack]

There's something you don't see everyday. An 84% drop.

http://i165.photobucket.com/albums/u70/macktime/bs.jpg

There's something you don't see everyday. An 88% rise.

http://i165.photobucket.com/albums/u70/macktime/3_24_08_17_01_47.png

[lamboguy]

this was the crash that was gonna happen. it happened and now the dow goes to 15k.

gold might take a rest here for awhile. will let you know if its any good once it goes back and test's high's

[riskman]

A new BusinessWeek cover portrays Ben Bernanke in a pose reminiscent of Lenin, branding him “a reluctant revolutionary.”

In the lead piece, titled “The Fed’s Revolution,” they point out that the Bear Stearns buyout, and the Fed’s willingness to lend directly to Wall Street brokers, represent bold steps that have never been taken before.

BusinessWeek goes on to note, “Bernanke is going further than Greenspan ever did in responding to a popping bubble. He has pulled out all the stops, inventing new ways to pump money into a resistant financial system.”

As we can see now, the revolution is going badly.

Under the leadership of the Treasury and the Fed, we are barreling headlong into a murky world of state-sponsored capitalism, with plenty to make people angry on both sides.
Those in favor of free market capitalism are disgusted by the blatant heavy-handedness and incompetence of government involvement. Those in favor of government involvement are disgusted by the juicy favors and sweetheart deals doled out to insiders.

[PaceAdvantage]

P.A.


Don't think of this as a bailout, think of it as an excellent buying opportunity. At $4-5, this stock is way undervalued. What do you do if the whole world thinks the sky is falling and you find a good stock that's the victim of panic? Buy. I did.

Dick

"Like a midget at the urinal,
......I'm always on my toes!"Dick Schmidt is my freakin' HERO.

Recently, Dick Schmidt was spotted after loading up on BSC:
n3EAa0YrAr8


Another clip surfaced of Dick shortly BEFORE he made the plunge:
rSZUfLRaGbo

[riskman]

I remember hearing for years and years and years and years about the derivative crisis that was about to smash the markets, but never came....are you saying THIS is the 'who' I've been waiting for all these years?

Are you saying this is the giant derivative crisis all the chicken-littles have been crying about for at least ten years, but they've fooled us into thinking this is about bad bets on sub-prime mortgages?


These two articles that appeared in the Sunday, New York Times Business Section is intresting to say the least.
"The " derivatives " is huge, unregulated and opaque because participants undertake the transactions privately and don't record them in a central market. The growth in the market and the potential for disruption, as a result of its size has surely caused regulators to lose plenty of sleep. " The value of the insurance oustanding stood at 43 Trillion last June according to the Bank for International Settlements.

http://www.nytimes.com/2008/03/23/business/23how.html


http://www.nytimes.com/2008/03/23/business/23gret.html?_r=1&ref=business&oref=slogin

[skate]

So, the value of "Global-Economy" has grown four fold over the last 5 years and the Insurance grew with the economy.


Seems about right.

[Dick Schmidt]

Thanks for the kind words PA, but it wasn't really a hard trade to make. The building that Bear Sterns owns in NY is worth about $8 a share. $2 a share was a joke, but even if I had to settle for that, it provided a safety net. I bought 3,000 shares at $4.85, ($14,550) so my maximum risk was $2.72 a share. If I have to settle for $2, it's not such a bad hit and I see the upside as quite a bit more. At $10 I double my bankroll and I'm holding out for more, greedy SOB that I am. Ya got any gum?????

Dick

I only use my gun whenever kindness fails.