Drexel went under because they had no friends. Nobody would merge with them or even loan them money. Drexel was known as the guys in the black hats. Bear isn't hated as much as Drexel was. If Bear doesn't have enough cash to save itself, it's name will be tagged on to the end of one of the other big financial institutions.
don't you have to own the puts over the weekend? I mean what's going to happen? Somebody 's gonna come out and say, "it was all a mistake!! No credit crunch."
14-Mar-08 09:22 ET In Play Bear Stearns confirms that it agrees to secured loan facility with JPMorgan Chase (57.00 ) -Update : Co confirms that it reached an agreement with JPMorgan Chase (JPM) to provide a secured loan facility for an initial period of up to 28 days allowing Bear Stearns to access liquidity as needed. Bear Stearns also announced that it is talking with JPM regarding permanent financing or other alternatives. "Bear Stearns has been the subject of a multitude of market rumors regarding our liquidity. We have tried to confront and dispel these rumors and parse fact from fiction. Nevertheless, amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated. We took this important step to restore confidence in us in the marketplace, strengthen our liquidity and allow us to continue normal operations." The co can make no assurance that any strategic alternatives will be successfully completed.
Rumor is GS,LEH,MER,MS all played against MSC this time, they would like to kill MSC because of its tie to Middle East and Possible Communist money.
I'm curious what kind of a position Joe Lewis put on Bear. CNBC is reporting he was long the stock via short puts which means he could be down as much as $800 mil....but thats assuming a naked short put which would be downright foolish. Wonder what the real position is....guess we'll never know.