Quote :

"I disagree with Barry on this one big time. What the hell is the discount window for if not to be tapped in times of liquidity crisis? This is precisely how the system is supposed to work. I mean we tried that whistling past the graveyard while banks go under thing during the Great Depression. It didn't work out so good. Calling it a "Bailout" is pretty disingenious on the part of the financial press as well. When you use an existing facility for the purpose it was designed this is not really a bailout. Nor is the Fed or JPM taking any equity stake in Bear. Nor are Bear shareholders being protected against solvency issues. This is a 28 day loan, the financial equivalent of payday lending. Yes, it signals Bear was in trouble but at least at this point the possibility remains that it was a crisis of confidence not solvency."

Payday lending is loansharking, but that's neither here nor there.

I seriously doubt that money from this loan will ever return to the Fed. And the "collateral" that was put up won't be able to cover cause it's not worth anywhere near what the Fed took it at.

Bear Stearns is most likely dead and will get bought by someone else.

Here's Bear Stearns' take on things, highlights from their conference call: http://www.cnbc.com/id/15840232?video=685850927&play=1

Another video titled "There was some extremely suspicious options activity surrounding Bear Stearns this week." http://www.cnbc.com/id/15840232?video=686026799&play=1

[Edited on March 14, 2008 at 5:23 PM. Reason : /]

3/14/2008 5:16:37 PM

^

Yes, I mean barring one of the greatest turn around stories in history Bear as an independent institution is gone. I have heard a bunch of names in terms of who might pick them up though of course Morgan seems the most likely at this point.

However, I don't see why - at least yet - they are likely to default on their loan to the Fed. Nobody that I have heard has suggested that Bear was insolvent. At least at this point this looks like a liquidity crisis not a solvency crisis.

3/15/2008 8:23:52 AM

^^

Also, Burnett and that other guy were saying that "someone knew" - Well no shit. Their clients, creditors and counterparties knew. When you call up Bear and say "I'm going to need to cash out my $200 Million trading account" and they say "Yeah, well - um - we're going to have to get back to you on that one" what do you think is happening.

Would you say "Oh despite all those rumors I am confident that Bear will be fine. They probably just had a lot of back office people call in sick today and things are running slow"

3/15/2008 8:45:37 AM

Who do yall use for managing your brokerage accounts? I'm planning on getting back into investing in addition to using my financial planner, and currently have two brokerage accounts.

One is with ETrade, and then one that I inherited is with CharlesSchwab. I'm not too sure what I think about the $13 fee each has.

3/16/2008 11:55:08 AM

I'm using Etrade right now, but I'm seriously thinking about switching. They've gayed up stuff here recently and it costs more for trades than some of the other popular companies, like scottrade.

I used to be able to transfer funds from my other bank almost immediately, but now they have some 5 business days waiting rule, which last time turned into about 8 days. When I first signed up my money transfers showed up in the account the next day.

And, used to I could call customer service and get either an American, or someone who sounded a whole hell of a lot like an American. And, by used to, I mean less than 2 years ago. Last time I called it was definitely not an American and they couldn't seem to understand that I wanted to know when the hell my money was going to show up.

Long story short, etrade's extra cost for trades isn't worth it anymore IMO.

3/16/2008 5:40:35 PM

JPM eats Bear for $2/share!!! unbelievable

3/16/2008 8:30:39 PM

Wow, thats crazy. How can shareholders possibly agree to that?

Quote :

"The deal marked a 93.3 percent discount to Bear Stearns’ market capitalization as of Friday"

http://www.msnbc.msn.com/id/23662433

...

Quote :

"The company is set to report its first-quarter results after the closing bell on Monday."

or will they be begging for it after the close tomorrow?

[Edited on March 16, 2008 at 8:58 PM. Reason : first-quarter results tomorrow ]

3/16/2008 8:57:14 PM

Damn, sorry for double post, but just saw this shit.

http://www.msnbc.msn.com/id/23664039

Quote :

"The central bank approved a cut in its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans."

[Edited on March 16, 2008 at 9:01 PM. Reason : getcha popcorn ready for tomorrow]

3/16/2008 9:00:39 PM

so what should be shorted tomorrow?
-LEH
-XLF

?

or maybe buy SKF

[Edited on March 16, 2008 at 9:11 PM. Reason : .]

3/16/2008 9:09:30 PM

Dear God, two dollars a share. That's not a buyout offer, that is a slap in the face. That is 7% of the Friday closing price of $30, and just last year, this stock was $169/share. I feel sorry for the employees there that saw their retirement account decrease in value 98.5%. A third of the company was employee-owned.

Nikkei off 4.2% and Hang Seng of Hong Kong down 4.9% since opening Monday (a couple hours ago). The dollar is down 3 yen to 96 yen. For those that don't follow forex, 3% is a huge move.

Here is Barry Ritholz (a bear for those that don't know) on $2/share.

Quote :

"You call this a rescue? Bear Stearns Cos. reached an agreement to sell itself to J.P. Morgan Chase & Co., as worries grew that failing to find a buyer for the beleaguered investment bank could cause the crisis of confidence gripping Wall Street to worsen. "The deal calls for J.P. Morgan to pay $2 a share in a stock-swap transaction, with J.P. Morgan Chase exchanging 0.05473 share of its common stock for each Bear Stearns share. Both companies' boards have approved the transaction, which values Bear Stearns at just $236 million based on the number of shares outstanding as of Feb. 16. At Friday's close, Bear Stearns's stock-market value was about $3.54 billion. It finished at $30 a share in 4 p.m. New York Stock Exchange composite trading Friday." This was not a bailout of any sort. What the NY Fed did was allow for an orderly liquidation. The Fed is providing the liquidity for JPM's Bear unwind, guaranteeing a good chunk of the debt: "The central bank also approved the financing of JPMorgan Chase & Co.'s purchase of Bear Stearns Cos., including support for as much as $30 billion of Bear's assets." What does THAT mean? "Support for as much as $30 billion of Bear's assets." Who is buying this -- the Fed, or JPM ? Truly, an amazing development. ~~~ This whole affair raises many more questions than it answers: • What sort of due diligence did British billionaire Joseph Lewis do prior to picking up 6% of Bear? • The Fed cut 25 bps Sunday night -- what is THAT gonna do? • Goldman Sachs Group will announce asset writedowns of about $3 billion this week -- what else is out there in terms of iBank write downs? • Nikkei off 3.6% in early trading; Dow Futures off 240, S&P 500 down -32.70, NASDAQ down -38.25 • Of all the firms most similar to Bear Stearns, one name keeps coming: Lehman Bros (LEH) What more will we learn tomorrow? "

[Edited on March 16, 2008 at 10:04 PM. Reason : /]

3/16/2008 9:54:14 PM

i only watch one stock cause i get it for free. those fucking asian bastards and their weakass cell market are killing me these past few months. and we're even gonna post a profit

3/16/2008 10:01:21 PM

http://youtube.com/watch?v=MX6rC1krGp0

[Edited on March 16, 2008 at 11:11 PM. Reason : wowaweewa, $2 a share..]

3/16/2008 11:09:15 PM

whos crying right now?

3/17/2008 9:04:38 AM

Quote :

"Wow, thats crazy. How can shareholders possibly agree to that?"

Bear was gone, I don't think anyone else could rescue them before the open of business today.

Bear executives really made a deal to save the jobs of Bear employees. The value of the company was nothing in the absence of a deal and everyone knew that.

I agree with some commentators that $2 a share was just because $1 or $0 would a sent the financial press wild.

Just as a note, this is how big financial institutions go belly up. Declaring bankruptcy or shutting the doors and laying off your employees is highly unlikely because of the instability it generates. No one wants to see that happen.

If Citi goes belly up it will follow a similar pattern.


As a note I rate the chances of Lehman failing as pretty high at this point. The Fed has really got to say something magical to put fears of a run on Lehman to rest.


[Edited on March 17, 2008 at 9:42 AM. Reason : .]

3/17/2008 9:36:46 AM

y'know, it's kind of shocking that BSC survived the great depression, but could not survive this.

I wonder if we'll see a lot more consolidation. It wouldn't surprise me if lehman is next.

3/17/2008 11:02:22 AM

Is 98 (LEH liquidity in billions) the new 35 (BSC liquidity)?

Lehman is on death watch - the high level denials have already started.

Quote :

"After reading our "Lehman Too Big To Fail?" post this morning, a high-level Lehman insider quickly reached out with two key reasons why Lehman (LEH) isn't in the same predicament as Bear Stearns (BSC): The Fed's new move--giving broker-dealers access to the discount window--changes the whole ball-game. If the Fed had made this move last Wednesday, the insider argues, Bear wouldn't have been toast. Lehman's liquidity ratio is far stronger than Bear's was."

http://www.alleyinsider.com/2008/3/lehman_we_re_not_bear_and_we_re_not_screwed

3/17/2008 2:09:46 PM

"The New York Yankees paid more for Alex Rodriguez than J.P. Morgan paid for Bear Stearns."

3/17/2008 4:10:32 PM

so buy BSC since its at a bargin basement price and hope that JP Morgan can bring it up a little bit and then sell it off?

3/17/2008 4:30:37 PM

the bigger the risk the bigger the loss!

only talking about the mortgage investment. i think im gonna take all my assets and use them to fund a bad credit car sales marathon

3/17/2008 5:08:15 PM

Quote :

"Just as a note, this is how big financial institutions go belly up. Declaring bankruptcy or shutting the doors and laying off your employees is highly unlikely because of the instability it generates. No one wants to see that happen."

I guess 50% is better than 100%.

God I love the smell of capitalism in the morning...

3/17/2008 5:24:21 PM

3/27 subprime arms are to blame

3/17/2008 5:39:05 PM

it sounds like a good old fashioned great depression era run on the banks. im very curious to see how involved the government gets in this. its like no matter what the investment, the government WILL cross any bridge... but only when they have to. the depression, savings and loan, junk bonds, and now this.

i dont like it really...

^the people who invested in them thinking that the people who were dumb enough to get them would actually pay them...

3/17/2008 5:41:19 PM

3/17/2008 6:02:48 PM

I bet it would suck to come in to work today as a bear sterns manager.

3/17/2008 7:51:51 PM

^ With this stuck to the door:

3/17/2008 7:53:45 PM

bwahaha

3/17/2008 8:37:46 PM

Quote :

"I guess 50% is better than 100%. God I love the smell of capitalism in the morning... "

I am actually shocked that Morgan is thinking about laying off 50%. I would be interested to see the percentage estimates that are administrative workers versus bankers, traders, and executives.

I mean a healthy fraction of Bear shareholders have got to be employees. Why would you even want to mess with that proxy bloodbath??

3/17/2008 8:55:29 PM

I could see 50% layoffs...besides your overlapping admin workers, you're also gonna set cutbacks in research, back/middle office, management, etc...the main prize is Bear Stearns' Prime Brokerage business, for which BS is one of the best on the street and JPM desperately needs...great move for JPM, bad move for BS shareholders

3/17/2008 9:44:33 PM

there is no way that will pass, shareholders will not vote for it, especially if theyre getting laid off lolol

3/17/2008 10:09:58 PM

Ok, now for some more bullish talk -- Tomorrow's Visa IPO.

Good Article:

Visa’s Record IPO Shaping Up as a Profitable Play for Long-Term Investors
http://www.moneymorning.com/2008/03/18/visas-record-ipo-shaping-up-as-a-profitable-play-for-long-term-investors/

3/18/2008 8:19:35 AM

just about 100 shares of ARNA, Arena Pharmaceuticals, the makers of that fat pill that got approved for further testing (human trials).

3/18/2008 8:40:35 AM

Good article on Visa. Will shares be available tomorrow at market opening?

3/18/2008 8:47:14 AM

Crap, I'll be in my Arabic class tomorrow during the market open. Guess I won't be able to get in on it as soon as I had hoped...
10-10:15 I'm between classes. Maybe I can get Scottrade to help me out.


Can I tell it to buy Visa stock, no matter the price (within reason), when the market opens?

3/18/2008 9:25:09 AM

isnt that just a market order?

3/18/2008 9:26:02 AM

Hell if I know...I've always done this stuff manually. Never said "trade XYZ stock at XYZ time for XYZ price".

3/18/2008 9:31:31 AM

Yeah, that's just a market order.

3/18/2008 9:32:39 AM

Quote :

"Who do yall use... "

I use Zecco. 10 free trades a month, then $5 each after the initial 10 IF you have at least $2500

cash transfers go through next day. the first request took about 3 days but thats expected.

Ive been very happy with them. I also have a Sharebuilder account, that just sits there now. But I think that one is $10/trade.

Anyone else use Zecco? Im trying to figure out what the downside is and havent seen it yet. Only been using it for a couple months now.

3/18/2008 9:37:24 AM

Quote :

"The major indices open on a strong note ahead of the 2:15 ET FOMC announcement. Helping to lift the market is better than expected earnings reports from Lehman Brothers (LEH) and Goldman Sachs (GS). With regard to the FOMC announcement, fed funds futures are fully pricing in a 100 basis point cut and suggest a 6% chance of a larger 125 basis point cut. The feds funds rate stands at 3.00%. Economic data were somewhat poor this morning. The February core PPI reading rose 0.5%, which was more than the expected rise of 0.2%. This indicates inflation was higher than expected. Separately, February housing starts topped expectations at a 1.065 million annualized rate. However, building permits came in at 0.978 million, which missed expectations. "

3/18/2008 9:40:03 AM

^^
I've never used it, but saw this in my inbox from a while back

Quote :

"Go to any brokerage other than Zecco, they are horrible, they miss order, overcharge margin interest, no support tools, no trailing stop, I moved to TD Ameritrade, and very satisfied with it. "

FWIW

3/18/2008 10:22:30 AM

Anyone else worried that the cut this afternoon might not be as big as people are hoping?

3/18/2008 11:03:53 AM

^ The Fed will give the market what the market expects.

3/18/2008 11:29:06 AM

Alright, I'm considering selling about $4k worth of stock to get some Visa tomorrow. I could sell some more but I'd have to sell from my CSCO, which I'm currently up up 8% on.

Any thoughts? 20 minutes until the bell closes...

3/18/2008 2:41:17 PM

^^ No soup for you.

2.25%

Bernanke favors a slow bleed to a sudden hemorrhage...

[Edited on March 18, 2008 at 2:42 PM. Reason : ...]

3/18/2008 2:42:00 PM

Quote :

"I could sell some more but I'd have to sell from my CSCO, which I'm currently up up 8% on."

Wouldn't you prefer to sell a stock on which you're up to have a more balanced portfolio?
I'm thinking about picking up 2K worth tomorrow AM.

3/18/2008 2:48:09 PM

Hm? My CSCO is up 8% since I bought it. Didn't mean to type "up up" though...

I'll probably end up selling my JAVA and my VWM -- I'm way down on both, but they'll never regain it. I'd rather at least attempt to make it back in VISA.

3/18/2008 2:50:44 PM

I mean, shouldn't you sell high, not sell low...

3/18/2008 2:54:28 PM

Quote :

"I mean, shouldn't you sell high, not sell low..."

VMW and JAVA are NEVER going back up to where I bought them. There's no way I can make them up without selling and buying something else...it just isn't happening.

I'd rather take the loss now and at least try to make it up than let them sit there in squalor as it is.

3/18/2008 3:01:34 PM

Quote :

"^^ No soup for you. 2.25%"

That was the economists' consensus...if not the traders'.

[Edited on March 18, 2008 at 4:50 PM. Reason : .]

3/18/2008 4:49:46 PM

Visa IPO'd...late today...?!
$44/share

http://news.yahoo.com/s/ap/20080318/ap_on_bi_ge/visa_ipo


wat?

3/18/2008 7:27:57 PM

I was getting my hair cut earlier today and the guy beside of me (older guy, looked like a farmer) was talking about all this money in stocks and how when a big bank bought out whatever small time bank he was with that they started charging him account maintenance fees. well, he said he went up to the bank after they told him he needed to pay these fees and told them to sell all 400 shares of his stock.. at this point I'm thinking hey maybe the dude had some real money in there and the bank actually cared about his account...

He said he bought @ $1.20 and sold @ $1.30...two years later.

Whatever stock it was is apparently worth $16 today according to him.. dumbass

[Edited on March 18, 2008 at 7:41 PM. Reason : asdf]

3/18/2008 7:40:56 PM