RIP, Bear Stearns

[Lemur]

An American giant has fallen. Rest in peace, Bear Stearns.

[Beirut]

To the Backroom and awayyyyyyyyy!

[Gregoshi]

Bah! Let him rot. He faked all that survival stuff in Man vs Wild. Staying in hotels when he supposed to be out roughing it. I won't miss the huckster one bit. Oh, and I thought he was English?

Yes, I know Bear Sterns is a bank...just playing stupid (which I do, alarmingly, too well)

[Lemur]

Wow, in the final deal with JPMorgan they sold themselves for $2 per share. That's incredible for a stock that was worth $90 a year ago. Talk about your bargain-basement discounts.

[drone]

Add to that low share price the fact that the Fed (i.e. us taxpayers) get to assume the riskiest portion of Bear's liabilities. Looks like I need to invest in paper futures, the presses are going to be rolling overtime at the treasury.

Smart move by JP, though.

[macsen rufus]

Looks like I need to invest in paper futures

Pssst - don't go too long on that, you do know bank notes are printed on cotton fibre, right?

[Crazed Rabbit]

One reason not to listen to Jim Cramer - he advised holding on to stearns stock on March 11 (at slightly over $3).
http://www.businessandmedia.org/arti...317110946.aspx

CR

[Lemur]

The taunting has begin. A friend sent me this pic from Bear Stearns HQ in Manhattan:

[Goofball]

This is a blatant case of the super rich screwing Joe Lunchbox investor. The book value of BS assets on Friday was somewhere around $8 per share. This is a backroom deal sanctioned by the Fed that lets JPM get a HUGE discount on a company that will make them lots of $$ going forward, but screws over the regular shareholders. The regular shareholders would have been better served if BS filed Capter 11.

I hope that the employees (who control 1/3 of BS stock) vote not to accept the deal.

[Vladimir]

This is a blatant case of the super rich screwing Joe Lunchbox investor. The book value of BS assets on Friday was somewhere around $8 per share. This is a backroom deal sanctioned by the Fed that lets JPM get a HUGE discount on a company that will make them lots of $$ going forward, but screws over the regular shareholders. The regular shareholders would have been better served if BS filed Capter 11.

I hope that the employees (who control 1/3 of BS stock) vote not to accept the deal.

Joe Lunchbox needs to pull his head out of his canteen and invest in mutual funds.

[Goofball]

Joe Lunchbox needs to pull his head out of his canteen and invest in mutual funds.

Erm...

What, pray tell, do you think mutual funds invest in?

[Vladimir]

Erm...

What, pray tell, do you think mutual funds invest in?

Many stocks which many people contribute to. Don't give me that poor Mr. Working Class routine when a single stock goes down. Real investors invest for the long term.

[Goofball]

Many stocks which many people contribute to. Don't give me that poor Mr. Working Class routine when a single stock goes down. Real investors invest for the long term.

So what about the "real investors" who invested for the long term in BS?

[ICantSpellDawg]

Mutual funds are just pre-diversified portfolios that you can buy into. If anyone has a mutual fund that is a bit more active than passive and happened to be invested in Bear Sterns, they are pissed.

I don't understand though - did J.P. Morgan do a force buyout and then send people checks for $2 per share or are those stocks still active but under new ownership?

In the first case that stinks. In the second case it probably isn't that bad. Anybody know? Has this already been discussed?

[drone]

If I understand correctly, the deal was made to halt a bank run on Bear Sterns. Without the backing of JP Morgan and the Fed, the company would have tanked today since it would be unable to cover the run. The shareholders will get their $2/share and should be happy they are getting anything. The BS execs should get the wall, but they will likely get nice parachutes instead.

I have a feeling that any bank that shows signs of weakness is going to get pummeled. And it looks like the Fed has promised to back anyone, so it won't surprise me if some unscrupulous types decide to start a run to see if they can take advantage. Sure things would be bad if Stearns had bit it hard, but this is a precedent that should not have been set.

JPM has got to be loving life. They got to buy a competitor for $236 million, and they got to unload the risky mortgage derivatives on the Fed for free.

[Seamus Fermanagh]

So what about the "real investors" who invested for the long term in BS?

If you have too much of your portfolio in a single sector -- much less a single company -- you are a high-risk investor and prone to taking bigger hits when things go south.

We can all thank the Belgians for developing the mutual fund concept -- asset allocation and moderating the risk are worthy goals.

[Vladimir]

If you have too much of your portfolio in a single sector -- much less a single company -- you are a high-risk investor and prone to taking bigger hits when things go south.

We can all thank the Belgians for developing the mutual fund concept -- asset allocation and moderating the risk are worthy goals.

And the profits we derive can be used to buy beer and chocolate.