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Bear Stearns collapses

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    #32
    Time Magazine
    Registered Users Posts: 8,452 ✭✭✭Time Magazine


    Some links:

    "Not a bailout"

    Paul Krugman on why nationalisation isn't always good.


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    #33
    Minder
    Registered Users Posts: 2,774 ✭✭✭Minder


    JP Morgan now bidding at $10 per share for Bear Stearns

    JP Morgan have also agreed to buy 39.5% of the shares of the company to prevent a share holder vote on the deal. In addition to the shares purchased, JPM will realise the first $1b in losses on the portfolio with the Fed carrying the risk on the rest.

    From here
    The New York Fed will take, through a limited liability company formed for this purpose, control of a portfolio of assets valued at $30 billion as of March 14, 2008. The assets will be pledged as security for $29 billion in term financing from the New York Fed at its primary credit rate.

    JPMorgan Chase will bear the first $1 billion of any losses associated with the portfolio and any realized gains will accrue to the New York Fed. BlackRock Financial Management, Inc. will manage the portfolio under guidelines established by the New York Fed designed to minimize disruption to financial markets and maximize recovery value.


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