Originally Posted By Mr X I mean, what would it take for you to get real on these issues. What would entail a "crisis" in your mind? I mean, something totally INSANE like bear sterns getting bought out for pennies on the dollar (like, say TWO DOLLARS a share?)? Or the fed making crazy, emergency discount window cuts over the weekend maybe? Oh yeah, that just happened. Oops. (this Bear Sterns news is insane, seriously...their share price was RECENTLY $85 per share, now crashed down to $30...and they're getting bought out for TWO dollar!? This is a company that survived the GREAT DEPRESSION people)
Originally Posted By jonvn Heck, Bear Stearns was about $160 a share a while a go. Apparently not exactly a beloved company, I heard today.
Originally Posted By DAR I tend to keep up with news pretty much and I've never heard of Bear Sterns until this week. I though that was the name of the guy on that Man Vs Wild show on Discovery.
Originally Posted By Sport Goofy << I tend to keep up with news pretty much and I've never heard of Bear Sterns until this week. >> That's exactly what the Fed and your government want to hear. The story that's not making the headlines today is that this whole deal was structured to save JP Morgan Chase, and not Bear Stearns. The government essentially handed JP Morgan all the assets of Bear Stearns at a value that is markedly below book value. At the same time, the Fed said that JP Morgan wouldn't have to bear the liability of the Bear Stearns subprime loan portfolio. So, JP gets all the value of Bear Stearns and none of the liabilities. The Bear Stearns real estate in NYC is probably worth at least three times what JP will pay for the company. While Bear Stearns business was unraveling, there is probably some amount that can be salvaged there, too. Why did the Fed set up this deal? JP Morgan Chase was on the ropes and on the brink of insolvency. The Fed conveniently sacrificed the lesser know investment bank to prop up the much larger and well-know name in American banking. Can anyone imagine the public sentiment if JP Morgan were to go under? At least now they can add the Bear Stear assets to their books, not worry about the liabilities, and try to soldier on for a bit longer. In the end, though, there will be some major banks fail in the U.S. The Fed isn't going to be able to stop it from happening. They've done their best to prop up Citi, and now JP. They can't save them all.
Originally Posted By Mr X ***I tend to keep up with news pretty much and I've never heard of Bear Sterns until this week.*** You don't keep up that much, I'd say. Bear Sterns has been the top headline on CNN.com on multiple occasions over the past 12 months, ever since two of their subprime based hedgefunds crashed and burned. But that's a good point Sport Goofy is alluding to. Better to sacrifice the less recognizable name. In the same light, I believe that's why the very strange buyout of Countrywide by Bank of America occurred. It wouldn't have been good for a known brand like Countrywide to go under (as they should have), and I believe BoA was offered some incentives from the Fed that we aren't aware of.
Originally Posted By Sport Goofy ^^ The Fed absolutely pushed the buttons for the BoA buyout of Countrywide.
Originally Posted By Mr X That much was obvious. Countrywide was crashing in very similar fashion to what just happened with Bear (although in the Bear Sterns case things happened shockingly quickly...it would suck to be a recent investor that's for sure...no way out...BOOM). In both cases, suddenly and inexplicably, a mystery buyout came out of nowhere that didn't make sense. Panic avoidance by the Fed is the only logical explanation for both (so how are they gonna handle all the others I wonder?).
Originally Posted By Sport Goofy I think they're just doing everything they can to prop things up until November and the elections. That's an awful long time, though, and things seem to be unraveling much quicker than I think a lot of folks anticipated.
Originally Posted By Dabob2 Jon Stewart played a video of Jim Cramer from LAST TUESDAY, ranting in his inimitable style, saying "Should you sell Bear Stearns? No, no, no!!! Bear Stearns will be fine." That's a paraphrase (except for the emphatic "no, no no!!!" but that was the gist.
Originally Posted By Mr X Dabob, that's the video of the week for the bear guys. Kramer is a joke...a rather scary joke since he is so recognizable that people actually take him seriously. He recommended buying Countrywide last year (had the CEO on his show, in fact) when they were at $30+, now it's a penny stock. Same with Bear Sterns. Same with LOTS of companies. It's amazing he's still on TV and still "important". He also led millions of investors off the cliff at the height of the dot.com bubble...somehow that got forgotten somewhere, somehow. I just don't get it, personally. He is as much a "throw darts at the wall" investor as the next guy. I guess he's got entertainment value or something.
Originally Posted By RoadTrip <<Two rivals of Bear Stearns — Lehman Brothers Inc. and Goldman Sachs Group Inc. — both posted quarterly profits that were significantly lower than they were a year ago, but higher than analysts had anticipated.>> I guess the sky is not falling after all...
Originally Posted By dshyates <a href="http://www.youtube.com/watch?v=4sZCNlPwG8o" target="_blank">http://www.youtube.com/watch?v =4sZCNlPwG8o</a> CNBC need to dump Jim Kramer.
Originally Posted By Sport Goofy << both posted quarterly profits that were significantly lower >> Beware if the trend continues into the next quarters. Most trends aren't getting any better here. A greater than 50% drop in earnings isn't a good news story.
Originally Posted By Mr X RoadTrip, do you really trust those guys to tell us the truth? I sure as heck don't. Not at this juncture. Countrywide lied blatantly. Bear Sterns lied blatantly (within TWENTY FOUR HOURS of the collapse!). New Century lied blatantly. American Home mortgage lied, blatantly. I could name twenty more companies easily. RoadTrip, do you REALLY, seriously trust the word of these companies at this point? Do you? By the way, for Dabob, here's the only video I could find of the actual Cramer quotes (sorry it comes from a nutcase kind of guy, BUT, in this case he makes some interesting points, plus it was the only Cramer clips I could find). <a href="http://www.youtube.com/watch?v=772PXNSrSiI" target="_blank">http://www.youtube.com/watch?v =772PXNSrSiI</a>
Originally Posted By RoadTrip <<Beware if the trend continues into the next quarters. Most trends aren't getting any better here. A greater than 50% drop in earnings isn't a good news story.>> At this point in time any profit at all for investment banks is good news.
Originally Posted By RoadTrip <<RoadTrip, do you REALLY, seriously trust the word of these companies at this point?>> Yes, I do. After the Bear Sterns disaster I think the other investment banks know that their financial statements are going to be scrutinized like never before. A week ago they might have put out garbage. Now? I don't think so.
Originally Posted By Mr X For the record, the price of Bear Sterns at the MOMENT Cramper said this was $62.97...as I write this post the price is $6.41. I'll quote exactly from the link... "Bear Sterns is not in trouble, if anything they're more likely to be taken over. Don't move your money from Bear, that's just being silly!" Anyone disagree that this guy is dangerous?
Originally Posted By Mr X ***After the Bear Sterns disaster I think the other investment banks know that their financial statements are going to be scrutinized like never before.*** You sound as if this is the first "disaster". I've been watching disaster after disaster for the past 18 months now, with the only x-factor being the size of the institution. This is nothing new to me. And you might believe them, but I do not believe a scum sucking lying word out of ANY corporate mouth at this point. Seriously...the art of subterfuge has reached a new low these days. A company can say "we're fine" one day, at the expense of all involved, only to say "oops" the next day...and the scum sucking CEO's keep getting away with it! It's really pretty amazing. Makes Enron look like a schoolyard scuffle.
