I apologize for my bad call and Im completely at a loss to explain the situation. I feel like I live in the matrix
Why apologize? To whom? If there's anyone on this site who hasn't been wrong before, they either never ventured an opinion, or they should be running a 5 trillion dollar fund.
Nice Call ByLo!! Way to see through the fog and emotion and get to what step 5 is while the rest (including myself) are still figuring out step 1.
Can anyone who follows JPM closely say whether JPM is highly exposed to a Bear failure? I ask because the post above may correctly suggest that the problem is JPM more than Bear, and specifically that the real bailout here is JPM, namely that it needs the 30 billion insurance from Uncle Ben, with Bear takeunder and Bear's cruddy book the pretext at hand, and that JPM needs Bear bonds to be bailed out. Anything in that conjecture and if so, why aren't JPM shares being crushed by shorts? Or is that coming soon enough?
Interesting suggestion. Like the UBS "takeover" of the much stronger SBC? Maybe JPM is one of the silent holders who are among those not fessing up to the USD200Bn of unaccounted for CDO's. Seems kinda strange that they could generate the same kind of profit growth without being in the same kind of business (and thus having the same kind of exposure). It would make sense to do it this way as JPM is a deposit taking institution with retail accounts. Shorts seem to be crushing LEH right now. Disclosure: I'm one of them. At a cursory glance, JPM show the type of volatility pattern I associate with somoene with a position too big for available liquidity desperately pushing the price to and fro to the last known liquidity pools, or perhaps on further examination just creating swings up and down to pull people in. You see this when getting out is more important than price. Seeing this in Oils stocks too BTW.
Thanks 1reason and newguy. Did anyone here catch the theatrics in BSC's or JPM's lobby today with the protesters? It will probably amount to nothing, but Dodd has subpoenaed documents relating to the BSC/JPM deal - from BSC, JPM and the Fed Reserve. This may be grandstanding, or it could lead to tremendous pressure, politically, to stem this deal or restructure it. I'm really not sure what is going to happen here. The most salient point made today by the media is that the fed could just have given a lifeline of 30 bln to BSC, rather than show such preferential treatment to JPM. That really made them look bad. I am wondering if I should load up for Bear (pun intended) with zillions of really, really cheap puts right now, on the possibility that this deal falls apart. Nothing ventured, nothing gained. http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20080326-000664-1549 Fed Faces Grilling on Bear Stearns Role |Published: March 26, 2008 3:49 PM By Michael R. Crittenden OF DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- U.S. lawmakers stepped up their scrutiny of JPMorgan Chase & Co.'s (JPM) purchase of Bear Stearns Cos. (BSC) on Wednesday, with the chairman of the Senate Banking Committee scheduling an April 3 hearing that could feature testimony from the Federal Reserve and Treasury Department. Expressing concern about the federal government's role in engineering the deal, Sen. Christopher Dodd, D-Conn., has asked Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson to testify before the committee. "While it is imperative to maintain the orderly structure of our markets, the sale agreement between JPMorgan Chase and Bear Stearns raises serious public policy questions," Dodd said in a statement. Others asked to testify include Securities and Exchange Commission Chairman Christopher Cox, Bear Stearns Chief Executive Alan Schwartz, JPMorgan Chairman James Dimon, and Timothy Geithner, president of the Federal Reserve Bank of New York. Dodd called the deal an "unprecedented arrangement," citing the Fed's decision to guarantee up to $30 billion in possible losses to help facilitate the acquisition. He said he was concerned about the impact on investors and the financial markets, as well as the exposure of taxpayers to any future losses stemming from the deal. Earlier Wednesday, the top two members of the Senate Finance Committee also said they plan to seek more information about the deal. Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa, said they had requested documents, names and other information from the Fed, Treasury and the two companies pertaining to the deal. Baucus said in a statement that it was the finance committee's responsibility "to pin down just how the government decided to front $30 billion in taxpayer dollars...and to monitor the changing terms of the sale." -By Michael R. Crittenden, Dow Jones Newswires; 202-862-9273; michael.crittenden@dowjones.com (END) Dow Jones Newswires 03-26-08 1549ET Copyright (c) 2008 Dow Jones & Company, Inc.
my guess is the BSC protesters had no idea what they were protesting about they were banging on drums and just wanted to show up on TV.. and this $2 to $10 thing sounds like something escaped from the cartoon network.. JPM just wants the building...
hmm but if the deal falls apart, wouldnt bsc price go UP instead of drop to below $10? I think the sentiment was that jpm got a steal, so if the deal falls apart the stock would gap up not down. not sure...