Comments: Après Ce, Le Déluge

Okay, I'll admit it, I have been sleeping again. What happened with Bear Sterns? Did somebody buy it? For a very low price?

Forgive me for knowing nothing about money.

Posted by Matt at March 17, 2008 07:21 PM

Hi Matt,

Yes, Bear Stearns is -- for all intents and purposes -- kaputski. Whether warranted or not, people lost confidence in Bear: the WSJ article (see the entry two down) spells out the whys and hows. That left Bear reeling and they were caught between a rock and a hard place: sell or file bankruptcy. So they agreed to sell themselves to JP Morgan Chase for $2 per share, which is not nothing but close to it. (A year ago, it was at like $169).

Of course, Bear's shareholders could still scuttle the deal, although I think that's pretty unlikely. There is no point in cutting off one's nose to spite one's face. Then again, they may take John Milton's outlook -- better to reign in hell than serve in heaven.

What does this mean for us? Well, two days later, it looks as if the answer is: not all that much. Still, there are a lot of people in New York who are now much poorer than they were a week ago.

Posted by Benjamin Kepple at March 18, 2008 08:38 PM
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