I had to throw this up. Bloomberg and CNBC both confirm that Bear Stearns has been bought by JP Morgan for only $2/share. The Fed also lowered the discount window by .25 to 3.25%. The price is stunning considering this was a $160 stock a year ago. The Fed also agreed to fund 30 billion dollars towards some of Bear Stearns less liquid assets. One of the quotes in reaction to the news:
"This is going to go down in very historic terms," said Peter Dunay, chief investment
strategist for New York-based Meridian Equity Partners. "This is about
credit
being overextended, and how bad it is for major financial
institutions and for
individuals. This is why we're probably heading into a
recession."
The world markets initially moved up but now are sharply down. Japans market is down over 3%. Gold is up almost $20 as more Fed intervention continues to weaken the dollar.
Well I think this sums up what a scam this whole housing game was. Mighty Bear Stearns, the #2 underwriter of mortgage backed securities in the US is now a few dollars from being a penny stock. What this tells me folks is once they got a chance look at the financials at Bear they realized there was nothing there. Selling BSC at $2/share is around $250 million and the Fed still had to partially bail them out. Their building in NYC alone is worth $1.2 billion!!! Bear made 2 billion in profit in 2006 at the peak of the housing boom.
This shows you what a house of cards the whole housing game was. Once prices stopped rising the bubble popped. Bear Stearns will most likely end up as the poster child for the housing bubble or as I like to say: the housing time bomb!
Well I think this sums up what a scam this whole housing game was. Mighty Bear Stearns, the #2 underwriter of mortgage backed securities in the US is now a few dollars from being a penny stock. What this tells me folks is once they got a chance look at the financials at Bear they realized there was nothing there. Selling BSC at $2/share is around $250 million and the Fed still had to partially bail them out. Their building in NYC alone is worth $1.2 billion!!! Bear made 2 billion in profit in 2006 at the peak of the housing boom.
This shows you what a house of cards the whole housing game was. Once prices stopped rising the bubble popped. Bear Stearns will most likely end up as the poster child for the housing bubble or as I like to say: the housing time bomb!
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