Monday, March 17, 2008

JPMorgan Buys Bear Stearns at 93% Discount on Friday's Close

Friday shareholders were over-valuing Bear Stearns by about 14 times.
This a continued bail-out of Wall Street institutions but this is the
first one to really hurt the shareholders. Losing 93% over the weekend - ouch! How many other financial institutions are similarly overvalued? That is less than the book value of their real property. JPMorgan Chase only paid that much after the Fed provided a $30 billion guarantee for Bear Stearns mortgages.

Fed Sets Currency Printing Presses at Full Blast • February M3 Growth at Record 16.8% was reported last week. Was anyone paying attention? Will shareholders of other financial institutions pay attention now?

UPDATE - As expected, other markets are reacting and Wall Street is bracing for the worst.

Asian Bond Risk Soars on Concern Financial Collapses Imminent

Oil, Gold Gain to Records as Dollar Tumbles. Japan's Nikkei 225 Stock Average and Hong Kong's Hang Seng Index slumped more than 3 percent.

Fed Lowers Discount Rate at Emergency Sunday Meeting, Expands Lending to Bond Traders to Prevent Meltdown

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