Doug wrote: > Initially $2, now it's looking like $10, when the stock was $60 just > a few weeks ago. That's admittedly greater than $0, but the > shareholders are still taking a big hit.
This is an aside from what you guys are discussing, but I find it interesting the game of chicken the Fed, JP Morgan, and the Bear Stearns' shareholders are playing. The Fed doesn't want Bear to go bankrupt and Bear knows. People with their savings invested in Bear funds would suffer, the fear would spread like fire, and Bernanke just can't contemplate that scenario. On the other hand, the Fed does want Bear to feel some pain. It may be that he's serious about not creating more moral hazard or it may just be payback for Bear's refusal to help with LTCM back in 1998. The threat is that if JP hikes the price too much, the Fed will refuse to underwrite the bid. But, for what we've seen, the market didn't exactly believe Bernanke/JP's $2 bluff and they played along with Bear. This morning, the quote got to $13.8. If they get to push it to -- say -- $20 without Bernanke pulling the plug on the deal, he's going to look like Wall Street's bitch forever. More than he already does... _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
