Did JPMorgan overpay?

Does not this deal need the blessings of Bear’s shareholders? The gov’t cannot shotgun this marriage. I can’t imagine the shareholders signing off on this. The one and only consideration so far is Bear is too connected to fail and therefore cannot be allowed to declared B/K. It would seem the CEO and whoever at Bear who signed off on this w/ JPM “took one for the financial system”. There is only 1 issue w/ this, they are suppose to take one for the shareholders and if B/K and a more orderly liquidation will net more than $2 a share (my wager said it’s a lot more than $2), they HAVE TO let the company file for protection. And bloody truth be told, the worldwide financial system be d_mned. The attorneys are going to have a field day w/ this one.

Dear Mr. Bernanke:

Could you please lend me $30 billion on a non-recourse basis so that I may purchase the State of Rhode Island? I know this is quite a request coming on the heels of your heroic efforts to save Wall Street, but you must agree with me that Newport is way nicer than the Hamptons and someone has to save it from those Rhode Islanders who continue to resist our efforts to turn it into Atlantic City. Mr. Trump and I would be more than happy to cut you in on the deal too and maybe even get you a guest shot on “Celebrity Apprentice” if you were willing to keep Providence as part of the deal. Whaddaya say?

Looks like the Gov has started up the printing presses to print more $100 bills. Unfortunately this makes my savings worth less every day but fortunately they are saving some asses on wall street!

The Fed did not guarantee this deal. They are providing financing for up to $30 billion. Losses on the current book, Tier III assets, plus diminution it the value of the current operations could far exceed this amount. So simply saying the “deal is guaranteed” is flat-out wrong.

With employees with the caliber of Asib, it’s no wonder that Bear “got bankrupt”. He must have been working in the loan documentation department, which is why no one can figure out who owns the trash they were peddling.

Darryl,
Bonus time is in Feb/March…It’s already happened. Coincidence? I think not.

“Used to work at Bear. Great firm. The anniversey and birthday parties were great. A classic living on the edge firm.
The girls were great as well. How could I forget the Sunday afternoon with Ann in the jet lounge? I can’t.”

No wonder they got bankrupt!

Hey Anonymous,
On that Sunday we spent together, did I mention that I used to be a man? You stud-
Ann from the jet lounge

I guess Mr. Ehrenberg did not read the part about the deal being backed by the Fed. I think the risk/reward here deserves a little investment, don’t you?

Are you people so naive that you “assume” that just because this stuff is guaranteed by the US Government that it really means anything. I’m waiting to see who bails out the US Government when it goes tits up…

Actually to address previous postings, the Fed no longer guarnatees the funds because an offer for purchase was made and accepted.

Sorry people, I’ve looked around and don’t see anything about the Fed guaranteeing anything. Closest I read was $30 Billion from the federal reserve to cover operating expenses, no guarantee. With only a day and a-half of due-diligence, they are definitely taking on some major risk, hence the “MAJOR” discount on the purchase price. But given how antsy the FED was regarding Bear I would think that there is more money available for the industry should things continue badly.

“The wheels on the bus go round and round”

What exactly has the fed guaranteed? I can’t imagine there’s no downside

Why does the taxpayer has to continue has to put up with paying for these mistakes. How much more of this can this country take. What happens if this country has to bail out not only the financial industry but also the airline and automobile industry? This country could this for only for so long. Please wake up people!

Did anyone notice on a day like this, “Pop” is touring Iraq?

I think nothing none of the assets are guaranteed by the Feds, they can ofcourse borrow from the Fed at 300,325 bips or whatever and keep rolling it over!

This writer needs to go to B-School and quick. Bear is probably worth well over a billion, but since no one has an accurate valuation of the toxic securities, the assumption on the street is that they are worth nothing. The reality is that these securities do have signficant value, but no one is sure of how much. The CDO’s are bundled securities- and while the Mortgage’s/MBS’s contained within those CDO’s may or may not be worthless, the other assets in the bundle do have value. $2/share sure seems to be a bargain to me when the headquarters building is worth nearly that much and other assets are being valued as nearly worthless.

Who writes this stuff??? The Government just guaranteed this deal! Is Forbes worth 3 dollars?

The fed guaranteed these assets. I think Jamie will come out smiling from the deal but not necessarily the crisis.

my 2 cents anyway. Quick,.. someone spot me $1.98, …

Everyone including Nos, NY, NY, keeps saying Bear’s Madison avenue headquarters building is worth more than $2/share, yes, but thats the asset side, if the bad liabilities are -$90B, who cares if Jamie gets a $2B building around the corner.

The buildiing on Park Ave is worth more than Morgan paid for the whole thing.

The building which BearStearns owns in Manhattan alone is worth the deal which JPM paid out for.

Used to work at Bear. Great firm. The anniversey and birthday parties were great. A classic living on the edge firm.
The girls were great as well. How could I forget the Sunday afternoon with Ann in the jet lounge? I can’t.

Picking up Bear Stearns for less than $300 million is what a poker player would call “good pot odds”. The risk is there to be sure, but JP Morgan is a strong enough company that they can absorb the worst-case scenario. Weigh that against the potential gains and it seems like a no brainer.

The alternative is for everyone to duck and cover and pray the market magically improves itself. We all know that isn’t going to happen. We should be patting JPMorgan on the back for taking a risk that may help stem the collapse of the market.

Goldilocks devours the Bear and in the process puts the Bear over a barrel and well, you know.
Jack B, NYC

But that ignores the Fed guarantees

I hope that they will still have some money left over to pay the Bear Stearns execs their annual bonuses.

Ban bridge, not golf. At least you can use your cell phone on the links. Let’s hope Jimmy used BSC shares as collateral for a loan on his swanky new Plaza apartment!

Thank you Mr. Cayne. You will go down in history of Wall St. as one who played golf while Bear Stearns burned.

Does this mean feds will now move in to ban golf?

I’m surprised to see this side of the story - I dont buy it one bit. JPM got a deal at the expense of the taxpayers. Its a great win for capitalism and free markets. I wonder who will bail me out when I do foolish things.

Please correct the following:

“Countrywide’s agreement in January to buy Countrywide”

YEA THOSE ASSETS CAN BE WIPED OUT IN A NANOSECOND BUT THEY ARE GUARANTEED BY THE FED!!! YOU CAN’T BE THIS DUMB!