JPMorgan won a bidding war for Bear, paying $2/share, or about $293M, for a firm whose share traded at a high of $170. Unreal. I have two questions:
1. Who got to bid? The NYT reports that roughly six groups got to put their numbers before the company, which was facing bacnkrupcy. JPMorgan won. I have to imagine that there were many foreign banks that could have and would have paid more. Were they invited to participate? Bear is a public company. I wonder what the shareholders think of this deal.
2. Wall Street is the bastion of purist capitalism and supply-side economics. How can any of these guys look themselves in the mirror when the Fed is providing $30 BILLION to finance Bear's "less liquid assets" - whatever that means - while JPMorgan is paying 1% of that for the company. This is a bail-out by members of the Bush administration, no matter what his public statements have been, and Bear should be ashamed to take it. Apparently, when people fall on hard times, almost anyone will look to the government for a little help. Unfortunately, I think this lesson will be lost on the Brooks Brothers set.
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