Some want Bear-JPM deal to fail

My Opinion in hindsight:
End result: a simple $1,000 put option investment made by an employee to hedge their personal holdings as a result of their Chairman’s public illiquidity rebuttal comments would have yielded approximately => $60,000 in liquid assets one week later after the $2 offer was made. Even better, since most were left scratching their heads upon the simple realization that the offer was well below the $10/share general opinion, and since it’s what they do..it wouldn’t be too prudent to reinvest the $60,000 put option windfall into say a $.25/share $10 call option and make a whopping 4,000% return in transaction #2. Net result $1,000=>$60,000=>$2,400,000 in two weeks! Not a bad plan If indeed it was one!…Even better, they never would have had to sell their original shares AND the initial put option purchase since made after Greenberg’s public liquidity rebuttal would be justifiable to the SEC as a simple insurance/hedge against their personal holdings. The call option reinvestment would be justifiable in that everyone knew that the $2 offer was significantly undervalued! What a Plan!

This just indicates how dire the state of the economy and this country is. In any other situation, a fire sale is a fire sale. You make mistakes as a corporation, and you pay the price for hanging your butt out in the wind of capitalism, including STUPID investments, like subprime mortgages. In capitalism, you pay the price when you lose, and you enjoy the price when you win. Bear Stearns lost, big time. That JP Morgan has upped their purchase price five times, indicates the high level of fear that is at the surface.

Would any other savvy investor, whether individual or corporate, move to buy an entity or asset class, then decide to pay five times more for it???? No, of course not. They would just walk away.

And the fed keeps printing money, and injecting it into the economy, raising inflation. Another short term fix like paying 5x what Bear Stearns is worth.

The bottom line, is that these financial institutions, becuase they sell money, which costs money to buy, are truly not on the hook that they hang themselves on when their investment choices go bad.

I am disgusted and at a loss for any integrity in the financial markets, Certificate of Deposits anyone?

I may regret this but I’d like the whole truth to come out. I’m tired of all the lies and covering up because it’s not going to get any better. It’s time everyone pays the price. ?? I just want things to be better for real and not pretend.

Why protect those that are afflicted with greed beyond avarice and no conscience? It seems that if you have enough money the state will bail you out.

Now that JPM has boosted its offer by 5x, no one at Bear should complain about the deal. There will surely be 7-8,000 layoffs, but without the rescue, there would be 15,000 unemployed and the firm would have gone the way of Drexel-Burnham. Do I hear $11 a share?

Your all missing the point; no corporation or the FED wants the securities that Bear Stearn owns marked to market! If they do, JPM and everyone else will be bankrupt and everyone will know the real trouble in our financial institutions.

I so agree with Ed Reisz, Orlando, Florida. Not only that 7000 indivduals will of lost thier jobs. These individuals not only that but they took a hit with thier share’s. What is going to happen to them? If the goverment going to take care of them?

It probably would surprise no one if we soon found out that the “put” options and rumors spread about BSC were six degrees from JPM. I never liked Bear Sterns but this deal just smells rotten, and the biggest loser in the end will be the credibility and integrity of our financial system. We have really lost it.

yep, my friend, it’s called the preference period

You say Bear has lost its credibility. I say JP Morgan and the others have also lost their credibility. Buying and selling investments that they can’t even value.

Your column and the press coverage misses the mark. Bear Stearns was forcibly shut down by Hank Paulson, and only then, hours later, did he open the discount window to investment banks. There is no reason to presume that had Bear Stearns been given access to the discount window, it would not have recovered and prospered. As you know Hank Paulson told Fortune magazine his favorite hobby is to watch snakes, especially snakes eating mice. The Bear was eaten by the Snake. The $35 million Goldman paid him was well deserved, it got rid of its best competitor.

Ironically, Hank Paulson pushed out his nemesis (and current Gov of NJ) Jon Corzine because the latter had supported the bailout of LTCM. He believed in the principle of letting banks fail in order to win the power struggle, and now he believes they should be bailed out to become the hero of the moment.

There is no doubt that the Fed is over reacting as it is under the heavy handed style of Hank Paulson. Here is a merger banker, a greet and meet guy, trying to use the taxpayers money to realign finance entirely. All in the name of crisis? His Goldman Sachs is triple what it was after Sep 11, Lehman is nearly triple what it was after Sep 11. The unwritten story of this saga is how the FEDS got had by Hank Paulson and the rest of the Wall Street gang. I mean if you need a bailout bigger than any in this century, your stock prices should be at all time lows, not triple what those were years ago.

Seriously, Joe, how many yachts can you ski behind? Bear failed, and there is almost certainly nothing that can be done about it other than succumb to the buy-out and give the markets an opportunity to return to health with the lesson learned. Bear failed and in bankruptcy would only return zero to its stockholders. That’s why they call it a risk market bud.

The truth is corporations are the biggest criminals around these days. They have controlled our government for a while. Now though, the Federal Reserve and the ENTIRE economy of the US. If the CEO’s and people that run these companies would give back the big bucks they got paid when they are responsible for driving their companies into nothing, we would not have the mess that is the US economy right now.

Malcolm X? I love that reference. Is this blue eyes soul brother going to save the beleaguered Bear from the clutches of capitalist evil? Now the story gets interesting. More.

Morgan Stanley is next!

This JPM deal with Bear stinks. I may be missing something but here is what it looks like to me. Bear needs cash because of a liquidity problem not because they are bankrupt. The CDO’s are not worthless just currently unpriceable. The fed will not front Bear the money to stay liquid but they will make it available to JPM if they purchase Bear. (JPM is a founding member of the Fed…convieninet). As a taxpayer who is ultimately on the hook for the 30B that the fed is putting up, I would rather seen them make it available directly to Bear and keep the company in tact. If we are going to help the banks stay afloat these funds should be available to all of the major banks not just JPM. Bear would take a hit, as they should but the livestors will still reatain fair value. This is plain and simple theft of Bear by JPM and the Fed. If I were Joe Lewis I would never give in to this because he and his fellow shareholders have been railroaded by the Fed and one of its founding banks. This is not what our system is about. The little guy is getting screwed and I know Joe doesnt seem like a littl guy but compared to JPM and the Fed he is.

The great employees, tax payers, and shareholder robbery by the FEDS.

Gangsters are now running things for pure profit. The BSC deal is the biggest financial THEFT in history. Mr. Lewis should sue JP Morgan/ Chase to stop this ridiculous deal. Welcome to the new world order where there absolutely no ethics.

So what,
I have lost 10’s of thousands of dollars and nobody gave me my money back!If price would have restored was he going to give 2 billions in charity.

What is so funny to me is that I here one of the Chase Executives tell employees in Feb that they were buying someone “BIG” in the next 30 days. This makes it all seem that much more “fishy”. How did the govt know on a Sunday that Chase would do this for 2$ a share, and no other company had the opportunity to buy? Sounds like this had been set up for a while now. Lewis obviously didn’t know about this Wed, but someone @ Chase did I can tell you that. Has it ever happened before that a bank bought a bank with hours notice? NEVER-

Hi Jim, Lewis seems to think that the alternative to the JPM deal is not bankruptcy but a better deal. You don’t explain why you rule out that possibility. Given that the artificially low mark-to-market values of some of Bear’s securities are driving this situation, it seems to me that an investor with deep pockets could make money by offering more than $2/share.

Joe Lewis thought Bear-Stearns looked good at $140 several months ago because it had been at $170. So 24 hours before the meltdown, he buys another 1/2-million-plus shares at $55. Is this what they call cost-averaging ?? If so, why didn’t HE buy the remainder at $2 a pop rather than J P Morgan ??

I heard the samething. The execs don’t deserve a bonus when there the reason the company is not solvent.

So typical, with executive pay. It’s almost to the point of “organized crime.”

For instance the la cosa nostra has a don = ceo. Ceo reports to a board, which is the samething as a don reporting to the Sicilian Mafia Commission.

As a billionare, if you just lost over a billion dollar of your investment pretty much overnight, would you accept the $2 share offer and move on? Or would you fight it all the way?

I’ve heard that if Bears files for BK before the end of the month all bonuses paid out to execs within the past 90 days would have to be returned/forfeited(sp?). Bears paid out large bonuses in Jan.