Bear Stearns The New Northern Rock

[wayneL]

How long before the Neo-Con Socialists (now there's one for the books) nationalize the 4th biggest US investment bank?

They can't just let it slide into oblivion now can they.

Hooooooooooooooooly Crap!

 

[macca]

Hi Wayne,

I am stunned that the Yanks are surprised, I liked this on Yahoo

http://finance.yahoo.com/tech-ticke...Stearns-Bailout:-Who-to-Blame?tickers=bsc,jpm

Oh so true

Macca

 

[noirua]

Bear Stearns is an investment bank and Northern Rock (formerly Northern Rock Building Society) is a mortgage bank, or should be.
The Fed had a policy of not bailing out investments banks and now they've stood on their heads and have done precisely what they agreed not to. That agreement was ennacted after the 1987 crash.
Always let these investment banks go down and let others pick up the pieces for peanuts.

 

[wayneL]

I'm still freakin stunned than many of us little guys trading at home in our underwear foresaw something like this happening years ago, yet "they" didn't.

We could have had a nice little recession in 2002-2004 and be growing nicely out of it now. But instead, we are now looking down the barrel of something extraordinarily serious... yet the Fed continues the actions that brought us here.

We seriously need revolution.

 

[Aussiejeff]

I'm still freakin stunned than many of us little guys trading at home in our underwear foresaw something like this happening years ago, yet "they" didn't.

We could have had a nice little recession in 2002-2004 and be growing nicely out of it now. But instead, we are now looking down the barrel of something extraordinarily serious... yet the Fed continues the actions that brought us here.

We seriously need revolution.

"Obama, Obama, Obama" - how revolutionary would it be to have the first black Prez in history?

Oh, and I hope you change your undies dailly, wayneL !! LOL

 

[wayneL]

"Obama, Obama, Obama" - how revolutionary would it be to have the first black Prez in history?

Oh, and I hope you change your undies dailly, wayneL !! LOL

Only when I start scratching. LOL

 

[dhukka]

"Obama, Obama, Obama" - how revolutionary would it be to have the first black Prez in history?

Oh, and I hope you change your undies dailly, wayneL !! LOL

The US had it's chance for real change with Ron Paul but predictably they choose not to deal with reality and continue to prop a system that quite clearly doesn't work.

It seems Bear Stearns has been put in the 'TOO BIG TO FAIL CAMP'. I wonder how many more will fall into that camp in the coming months as the good ol U.S.A (United Socialists of America) continue their policy of privatizing the profits and socializing the losses?

 

[Aussiejeff]

The US had it's chance for real change with Ron Paul but predictably they choose not to deal with reality and continue to prop a system that quite clearly doesn't work.

It seems Bear Stearns has been put in the 'TOO BIG TO FAIL CAMP'. I wonder how many more will fall into that camp in the coming months as the good ol U.S.A (United Socialists of America) continue their policy of privatizing the profits and socializing the losses?

I guess it all comes down to "how deep are the Fed's pockets"?

If they get stuck, maybe they could sell some of that mountain of gold bricks they have stashed away in Fort Knox to raise some cash to bail out their high finance buddies, thus pushing gold down and boosting the greenback in the process? LOL

Anythings possible now, ain't it?



AJ

 

[vishalt]

I guess it all comes down to "how deep are the Fed's pockets"?

If they get stuck, maybe they could sell some of that mountain of gold bricks they have stashed away in Fort Knox to raise some cash to bail out their high finance buddies, thus pushing gold down and boosting the greenback in the process? LOL

Anythings possible now, ain't it?



AJ

ahahahah that was funny

 

[prawn_86]

Wow, i didnt read about this until just then. Quite scary, and highly stupid of the Fed

Perhaps ASF members should pool some funds together and put in a bid ...

 

[noirua]

Wow, i didnt read about this until just then. Quite scary, and highly stupid of the Fed

Perhaps ASF members should pool some funds together and put in a bid ...

I suggest a bid of minus US$400 million.

 

[explod]

"Obama, Obama, Obama" - how revolutionary would it be to have the first black Prez in history?

Oh, and I hope you change your undies dailly, wayneL !! LOL

Yes the way things are going he will get in.

But the foundations are so bad it will contiue to get worse.

Then there will, prolly be one a dem ssasination's.

Then they will choose the Republicans to save them again and they will all be walking in the streets.

There will be a revolution all right but it will take 30 years for the USA to come back from it all in MHO.

You think what some of us have been inferring has been doom and gloom. Reading the Financial Review today says (between tghe lines) its coming through and we aint seen nothing yet .

 

[prawn_86]

March 16 (Bloomberg) -- JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. for about $2 a share after a run on the company ended 85 years of independence for Wall Street's fifth- largest securities firm and prompted a bailout by the Federal Reserve.

The central bank will fund as much as $30 billion of Bear Stearns's ``less-liquid assets,'' the two companies said in a statement today. The deal values New York-based Bear Stearns, with 14,000 employees, about $270 million, far less than the $4 billion market value on March 14. The stock had fallen 80 percent in the past 12 months.

http://www.bloomberg.com/apps/news?pid=20601103&sid=ar0QxIGdOnWI&refer=news

Amazing.

Am i gunna be able to get a job when i graduate...?

 

[reece55]

http://www.bloomberg.com/apps/news?pid=20601103&sid=ar0QxIGdOnWI&refer=news

Amazing.

Am i gunna be able to get a job when i graduate...?

Imagine how the people who purchased the stock on Friday feel.....

An instant 93% loss on investment..... ouch......

Cheers

 

[Kauri]

Imagine how the people who purchased the stock on Friday feel.....

An instant 93% loss on investment..... ouch......

Cheers

or even better....

Sunday Times..UK.., Joe Lewis, the 71-year-old currency trading tycoon, has lost close to 800 MLN USD in the collapse of the stock price of Bear Stearns, as he owns nearly 10% of the investment bank"s shares that he bought when the price was above 100 USD. Bear Stearns closed on Friday around 27 USD. The Times States that the huge paper losses could force Lewis to sell out of some of his other positions in order to meet margin calls from his lending banks.

 

[wayneL]

At least they didn't drag the entrails through the streets for months, as was the case with Northern cRock of Sh!te.

 

[mayk]

$2 is not a fair value for Bear Stearns, Their plaza in Manhattan is worth more than $1B. I don't know, what is the benefit of going so cheap . The deal was supposed to be around $20 not $2.
http://money.cnn.com/2008/03/16/news/companies/jpmorgan_bear_stearns/?postversion=2008031618

Well, now I know that in this volatile world it is best to stay away from financials even if they seem extremely cheap...

 

[Kauri]

I think it is a Fed bailout thinly disguised... JP.. apart from picking it up for $2 a share, have also got Fed guarantees of $30bln to go with it... kinda makes it an early Christmas...
and BS was due to report tonight..
with Lehman and GS tomorrow
and MS the day after...
Cheers
............Kauri

get ready for a shorting frenzy on other US banks this week as punters take positions on who will fall next...

 

[Julia]

A couple of months ago I'd have ridiculed the suggestion that I'd be asking the following question, but what would be the situation here should one of our major banks be subject to a run or fail under unsustainable write-downs?

Would the RBA bail them out?

Are all of us who are feeling safe with our funds pulled out of the share market and tucked away into term deposits really safe?

In the event of a bank failing, who has first call on the assets?

 

[dhukka]

$2 is not a fair value for Bear Stearns, Their plaza in Manhattan is worth more than $1B. I don't know, what is the benefit of going so cheap . The deal was supposed to be around $20 not $2.
http://money.cnn.com/2008/03/16/news/companies/jpmorgan_bear_stearns/?postversion=2008031618

Well, now I know that in this volatile world it is best to stay away from financials even if they seem extremely cheap...

I don't know how anyone could call this cheap considering the amount of crap Bear Stearns has on their balance sheet.

This is from Bear Stearns 2007 10K filing

As of November 30, 2007 and 2006, the Company had notional/contract amounts of approximately $13.40 trillion and $8.74 trillion, respectively, of derivative financial instruments, of which $1.85 trillion and $1.25 trillion, respectively, were listed futures and option contracts.

The aggregate notional/contract value of derivative contracts is a reflection of the level of activity and does not represent the amounts that are recorded in the Consolidated Statements of Financial Condition. The Company's derivative financial instruments outstanding, which either are used to offset trading positions, modify the interest rate characteristics of its long- and short-term debt, or are part of its derivative dealer activities, are marked to fair value.

The Company's derivatives had a notional weighted average maturity of approximately 4.2 years at November 30, 2007 and 4.1 years at November 30, 2006. The maturities of notional/contract amounts outstanding for derivative financial instruments as of November 30, 2007 were as follows:

This was written on the Prudent Bear forum:

I found the Bear Stearns "smoking gun"

It took a little digging, but I found it.

The real reason why the Fed panicked and, through Pigman JPM, bailed out Bear Stearns in the first such action since the previous Great Depression.

And here it is:

No matter how far down they bury it, it is still smoking.

That link is to their 2007 SEC 10k filing. Tucked away, well out of view on page 80, is the cold, hard truth as to why they were saved, and will be absorbed--amoeba like--into the belly of JPM.

Are you ready to hear the reason?

Can you handle it?

Are you sure?

Okay, here goes.

Bear Stearns has outstanding derivatives positions with counterparties totalling:

Thirteen trillion dollars.

That's right. Thirteen trillion.

Trillion.

With a "T".

No wonder they couldn't be allowed to fail.

And no wonder that JPM is being chosen to bail out Bear. Not because, as stated, JPM "clears Bear's trades" (which seems odd since Bear claims to be a clearing agent itself), but rather because JPM is already the largest derivatives house (with about $70 trillion or so in positions at last count) and acts as the bagman for the Fed/feds financial shenanigans.

So, now we know the truth. That truth being that we just came within a whisker of a complete, worldwide, systemic, financial derivatives meltdown.

Today.

It's just that simple.