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Re: [RT] TWO BUCKS a share!!! JPMorgan Acts to Buy Ailing Bear Stearns at Huge Discount



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Fed Cuts Discount Rate, Says Dealers May Borrow (Update1)

By Scott Lanman

March 16 (Bloomberg) -- The Federal Reserve reduced the rate on direct loans to commercial banks by a quarter-point and said it will allow primary dealers to borrow at the rate in exchange for a ``broad range'' of investment-grade collateral.

The central bank, in a statement today in Washington, also extended the maximum term of discount-window loans to 90 days from 30 days. The Fed approved the financing arrangement announced by JPMorgan Chase & Co. and Bear Stearns Cos. JPMorgan separately agreed to buy Bear Stearns for about $2 a share.

Fed Chairman Ben S. Bernanke is stepping up efforts to keep strains in financial markets from spiraling into a full-blown meltdown. Last week the central bank agreed to emergency loans to a non-bank, Bear Stearns, for the first time since the 1960s. Fed officials also announced a program to swap $200 billion in Treasuries for debt including mortgage-backed securities.

The Fed lowered the discount rate to 3.25 percent from 3.5 percent, narrowing the spread with the federal funds rate to a quarter point from a half point. >From tomorrow, primary dealers will be able to borrow at the rate under a new lending facility, to be in place for at least six months, the Fed said.

The actions are ``designed to bolster market liquidity and promote orderly market functioning,'' the Fed said. ``Liquid, well-functioning markets are essential for the promotion of economic growth.''

Investors expect the Fed to lower its benchmark rate by as much as a full percentage point, to 2 percent, when policy makers meet March 18. That would exceed the 0.75-point emergency reduction on Jan. 22, which is the largest cut since the overnight interbank lending rate became the main tool of monetary policy about two decades ago

----- Original Message -----
From: sue crew
Sent: Sunday, March 16, 2008 7:36 PM
Subject: Re: [RT] TWO BUCKS a share!!! JPMorgan Acts to Buy Ailing Bear Stearns at Huge Discount

Things are very serious
----- Original Message -----
Sent: Monday, March 17, 2008 10:27 AM
Subject: [RT] TWO BUCKS a share!!! JPMorgan Acts to Buy Ailing Bear Stearns at Huge Discount

JPMorgan Acts to Buy Ailing Bear Stearns at Huge Discount

 
Published: March 16, 2008
Bear Stearns, facing collapse because of the mortgage crisis, agreed Sunday evening to be bought by JPMorgan Chase for a bargain-basement price of less than $250 million, the two companies announced.
 
 
The all-stock deal values Bear Stearns at about $2 a share, based on JPMorgan?s closing stock price on Friday, the companies said. In contrast, shares of Bear Stearns, which fell $27 on Friday, closed at $30.
A deal for Bear Stearns would end the independence of one of Wall Street?s most storied firms and help halt a sweeping panic that set in at the end of last week, causing Bear Stearns?s stock to swoon 47 percent on Friday.


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