Looking back3

Holy crap:

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.

On Dec. 31 Bear Stearns closed at $88.25/share.


...and the Fed's in for another $30 billion.

In addition to the financing the Federal Reserve ordinarily provides through its Discount Window, the Fed will provide special financing in connection with this transaction. The Fed has agreed to fund up to $30 billion of Bear Stearns’ less liquid assets.

Capitalism rawks!


...misty watercolored...

Buy Bear Stearns (BSC - Cramer's Take - Stockpickr) despite all the toxic hedge fund handwringing, Jim Cramer said Friday on CNBC's "Stop Trading!" segment.

Cramer said that on June 22, 2007, when Bear closed at $143.75/share.


They bought it for $270 million.

Looking back2

Helicopter Ben to the rescue.

March 16 (Bloomberg) -- The Federal Reserve reduced the rate on direct loans to commercial banks by a quarter-point and said it will allow primary dealers to borrow at the rate in exchange for a ``broad range'' of investment-grade collateral.

The central bank, in a statement today in Washington, also extended the maximum term of discount-window loans to 90 days from 30 days. The Fed approved the financing arrangement announced by JPMorgan Chase & Co. and Bear Stearns Cos. JPMorgan separately agreed to buy Bear Stearns for about $2 a share.

Looking back:JPM To The Rescue

Interesting.

NEW YORK (Reuters) - Bear Stearns Cos Inc is hoping to announce a deal to sell itself to JPMorgan Chase & Co before Asian markets open on Monday, the Wall Street Journal reported on Sunday, as the investment bank struggles to save itself.

Bear Stearns, the fifth-largest U.S. investment bank, could sell itself for around $2.2 billion, the newspaper reported. That would amount to less than $20 a share.

The low sale price, equal to about two-thirds the company's $30.85 closing share price on Friday, signals just how dire the situation is for the 85-year-old investment bank.