Bear Stearns deal , legal ?

[Landis82]

Quote from Cutten:

BSC stock now at $7. Still sure that JP Morgan are the only ones capable of doing the transaction?

That's easy for you to say AFTER THE FACT. Where was Goldman, where was UBS, where was Morgan Stanley, BofA, or anyone else for that matter last Thursday night?

Seems like JPM was the only entity capable of stepping up to the plate last week. They were one of the only firms out there with a strong enough and flexible enough balance sheet to do so. If not, why weren't other parties involved?

And now you are saying otherwise?
After the fact?
Get real.

 

[ByLoSellHi]

Quote from Landis82:


Do you not think that the purchase of Bear was open to other investment banks over the weekend?

It was.
But right now JP Morgan is the only firm with a flexible ( and strong ) enough balance sheet to make this transaction doable.

No one else on the Street wanted to have to assume all of the litigation that will obviously come about with 250,000 transactions on the balance sheet! That is why JPM says that they will most likely incur $6 billion in expenses tied to this deal.

It's widely known that CITIC was willing to pay 1 billion+ for BSC, and possibly a lot more; in a very suspicious way, that offer was withdrawn and not mentioned again once he fed came out and trumpeted the arranged marriage between JPM & BSC.

The justification I've heard for the deal being done with JPM is that there was only 36 hours of due diligence allowed.

Lamest explanation ever.

Where there's smoke, there's usually fire.

 

[Pondracer]

If Fed money was used to shore up a CITIC purchase the howl would have been unbelievable.

 

[Landis82]

Quote from Cutten:

BSC stock now at $7. Still sure that JP Morgan are the only ones capable of doing the transaction?

I believe that you misunderstand what has been causing the upward pressure in BSC stock . . . It might just be coming from BEAR BONDHOLDERS that are trying to defend their place in "line".

And yes, at the time that BSC came crying to the FED last Thursday night, JPM was the only commercial bank with a strong and flexible enough balance sheet to take on BSC's issues and expedite a deal for the ENTIRE balance sheet of Bear, and not just pieces of it, as I'm sure some interested parties merely wanted.

It was ALL or NONE.
And JPM was the only commerical bank that had the balance sheet to commit to the ENTIRE transaction!

Is it debatable that Bear might still be around had the FED acted weeks earlier in opening up the discount window for everyone?

Absolutely!

But I am also well aware that there have been people like yourself that have been amazingly outspoken of how Bernanke should not be injecting "liquidity" into the banking system.

You can't have it BOTH ways, my friend.

 

[blackjack007]

Quote from Capablanca:


Something I do not get is why Bear Stearns was not given the opportunity to avail of the Fed's discount window to boost its liquidity. I seem to recall reading that if Bear Stearns could have lasted until March 27 they'd be able to. The natural question to me is why didn't the Fed just allow them to do so now ahead of time instead of the March 27 date?

the discount window was not available to investment banks, only commercial banks. since then, the fed has opened it up to brokerages as well. i'm not sure if this means bear would now be able to borrow from the discount window (because they have a brokerage service).