Posted on 03/16/2008 6:52:34 PM PDT by Ernest_at_the_Beach
he extraordinary weekend moves came as J.P. Morgan Chase sealed a deal to buy Bear Stearns Cos. for just $2 a share backed by funds borrowed from the Fed. The Fed board gave its approval to that unique funding arrangement, which guarantees JP Morgan against losses from buying Bear. See full story.
(Excerpt) Read more at marketwatch.com ...
Everybody likes holidays, and maybe if they stayed
home,saved gas, whoopee with the spouse-— it would
ease the energy crunch, increase their fitness......
This was posted above—”Do we really want the Federal Government to be the backstop for every (major and minor) financial downfall in our country? Just wondering here.”
Well when you can by out a bunch of greedy numbskulls
like Bear Sterns for so cheap why not, as it may help
protect homeowners that company got in a bind.
Give them some breathing room.Ed
Ugh!
Well,...I hope tomorrow is not too ugly!
I’ve never been a gold basher bc many of the arguments from gold bugs always made some degree of sense (even if they us economy found a way to make them appear as perpetual fools). Right now however, they are looking right for a change.
However, that hyperbolic chart in gold looks like all markets do, right before they are done. Looks like somebody could eat a 20% retracement if buying hear, without the fundamental trend for gold being broken.
Good luck to anybody buying in tomorrow on the sudden “discovery” that gold is a good investment, or the brilliant “insight” that the US Financial Markets appear to be teetering on the brink of ruin, LOL.
The question we should be asking is, which 'stable' member of the Big Banking Club will the next to brazenly pull 'an Enron', 'a Northern Rock', by issuing the Big-monetarily solid-Lie to the investing public and then in 24 hours, or less... the bank crashes, as in totally out of dough?
Turns out, if you’re watching the futures, that the Fed’s bailout of Bear Stearns via Bear’s shotgun marriage to J.P. Morgan at $2 a share isn’t being viewed particularly well.
“At least it’s not $1.99,” jokes one friend.
But his joking underscores the message the deal sends to investors: With a price that low, things must be worse than anybody really knows and, if nothing else, makes you wonder what’s on the liability side of Bear’s balance sheet.
That’s underscored by the Fed’s unusual Sunday night discount rate cut, which was done to “bolster market liquidity” and “promote orderly market functioning.”
“Bolster market liquidity” and “promote orderly market functioning” are two terms that, no matter how you couch it, broadcasts just how tenuous the situation really is. So does futures trading in gold, the dollar and oil, all of which are bracing for the worst.
I like the $1.99 line. That's kinda funny. But it does make you wonder what’s on the liability side.
I think a lot of folks are going to want a stiff one before going into work tomorrow morning. Good luck with your liquor stand! :)
I think your condum stand is a great idea. Maybe you can use “Recommended by the Luv Guv” as a motto.
Watch out for all those stockbrokers in their three-piece suits jumping out of the skyscrapers, the bums & hobos panhandling, and all the out-of-work men in the soup lines. Hey! Maybe we can get on with the CCC for $1.00 a day!
Greenspan trivia :
Greenspan is married to Andrea Mitchell of NBC
It takes a huge amount of gall. Mummbles Mouth should just shut the hell up!
LOL. Thanks for the heads up. I’m always looking for new and different ways to add pounds! ;)
*********************
Well then I am CERTAINLY your gal for that!
“So the Fed HAS to guarantee that JP Morgan won’t lose anything on the deal???”
As the only alternative to bear going under with all counterparty trades in danger, the fed had no choice on this matter (regardless of what decisions brought matters to this point).
confidence is a self-fulfilling prophecy sometimes. Will Lehman run into issues just based on the discussion of possible issues?
A lot of their shares were evidently owned by employees and management.
Well, it opened down 182 DJIA, but now is down only 99! So, so far, that’s not too ugly...
Check the time of this reply! DJIA is one hour old and UP $7.24!!! Now THAT’s volitile!!!
...Meanwhile, in an emergency meeting, the Fed cut the discount by 25 basis points to 3.25% on Sunday. The discount rate is the interest rate at which eligible banks can borrow money directly from the Fed.
In an additional move to increase liquidity, effective today, the Fed created a new lending facility that will provide financing to participants in the securitization markets, such as investment banks.
These developments have created new fears of what may be in store for other financial institutions. National City Corp. (NCC 8.80, -4.35) is down 33%, Cit Group (CIT 11.50, -3.73) has lost 24%, Lehman Brothers (LEH 28.90, -10.36) has slipped 26% and Washington Mutual (WM 9.06, -1.53) has given up 14%.
All of the ten sectors are trending lower. Not surprisingly, financials are the main laggards with a 3.8% loss. The energy sector (-3.4%) is also showing weakness as oil slips 3.0%.
http://finance.yahoo.com/marketupdate/update
As of 12:20 p.m. Symbol Last Change Dow Dow 11,827.59 Down 123.50 (1.03%) Nasdaq 2,169.03 Down 43.46 (1.96%) S&P 500 1,264.93 Down 23.21 (1.80%) 10-Yr Bond 3.3300% Down 0.0910
Dow 11,795.92 Down 155.17 (1.30%) Nasdaq 2,164.31 Down 48.18 (2.18%) S&P 500 1,261.62 Down 26.52 (2.06%) 10-Yr Bond 3.3260% Down 0.0950
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