Saturday, September 22, 2018


According to the scientifically unqualified, this is a “bailout!”:

Alan Schwartz, who was the chief executive of Bear Stearns when the investment bank collapsed, the first casualty of what would become the global financial crisis, said it was the government that set the price tag for Bear’s March 2008 fire sale to JPMorgan Chase at $2 a share. 
Shareholders were livid after Schwartz announced a deal with JPMorgan Chase (JPM) CEO Jamie Dimon that valued the company’s stock, which had traded at $172 a share as late as January 2007 and $93 a share as recently as February 2008, at just two bucks. The stock was trading at $30 per share as recently as days before the announcement.

Yahoo: Former Bear Stearns CEO explains how JPMorgan came up with their $2 a share offer in 2008


Andrew Anderson said...

The U.S. Federal Reserve agreed to provide financing for the transaction, including support for $29 billion of Bear Stearns’ losses on “less-liquid assets.”

Since the Central Bank should never lend to or buy from the private sector, including banks, then this part, at least, is a bailout.

Matt Franko said...

Yeah they probably provided an additional $29B to JPM to “finance” it and made it worse...

David said...

I know a broker that worked his 40 year career at Bear Stearns. He had near his whole retirement in Bear Stearns stock. He said he ‘lost everything ‘ but after JP Morgan aquired Bear Stearns, they ‘made him whole’.