Discussion in 'Wall St. News' started by THE-BEAKER, Mar 14, 2008.

  1. JP Morgan and NY Fed to fund Bear Stearns

    JP Morgan Chase said on Friday it would provide an unspecified amount of funding for Bear Stearns together with the Federal Reserve Bank of New York.

    The move comes on the back of growing concerns in the market that Bear Stearns was facing significant liquidity constraints. The concerns have hammered Bear Stearns shares, which were down nearly 20 per cent this week alone amid highly volatile trading.

    ”JP Morgan Chase announced that, in conjunction with the Federal Reserve Bank of New York, it has agreed to provide secured funding to Bear Stearns, as necessary, for an initial period of up to 28 days,” JP Morgan said in a statement.

    ”Through its discount sindow, the Fed will provide non-recourse, back-to-back financing to JPMorgan Chase. Accordingly, JPMorgan Chase does not believe this transaction exposes its shareholders to any material risk. JPMorgan Chase is working closely with Bear Stearns on securing permanent financing or other alternatives for the company.”

    Shares of Bear Stearns jumped as much as 10 per cent to $63 in pre-market action following the news.

    Before the news on Bear Stearns, US equity futures had pointed to a positive start for Wall Street, after data showed inflation held steady in February.

    Less than an hour before the opening bell, S&P 500 futures were 5.8 points, or 0.4 per cent, higher at 1,321.1, after earlier falling as much as 1 per cent. Futures for the Dow Jones industrial average rose 29 points to 12,180. Futures for the Nasdaq composite index were 18 points higher at 1,773.8.

    The US consumer price index, the most widely used barometer of inflation, was flat last month after rising 0.4 per cent in January. Core consumer prices, which exclude food and energy, were also unchanged after rising 0.3 per cent in January.

    In contrast, consensus forecasts were for an increase of 0.3 per cent overall and a rise of 0.2 per cent in core prices, according to economists polled by Reuters.

    Elsewhere on the economic front, interest rate futures were pricing in an almost 100 per cent probability of a 75 basis point cut in interest rates at the next meeting of the Federal Reserve on Tuesday.

    Nonetheless, the dollar strengthened marginally against a basket of major currencies.

    The yield on the 10-year Treasury note fell 6bp to 3.46 per cent, while the yield on the two-year note fell 6bp to 1.56 per cent.

    Oil retreated from its record highs, falling to around $109.80. But cocoa climbed to a five-year high on speculation a strike by cocoa workers in the Ivory Coast, the world’s top producer, would cut supply. The workers are demanding better pay and improved working conditions.

    Investors also awaiting a report on consumer sentiment, due at 10am.
  2. Being bailed out by Fed, as was CFC to the tune of USD55Bn. The banks always get their way. CFC bailout in thencontext of avoiding a bank run I can just understand but BSC is NOT a deposit taking institution and it's individual clients are all HNWI. THERE IS NO REASON FOR A PUBLIC BAIL OUT OF AN IB. If it is bankrupt then start winding up proceedings. Socialism for the rich. Private profits, public losses.
  3. Greenberg et al should be prosecuted for making deliberately misleading statements in light of what has transpired. This was blatant lying about BSC's financial condition.
  4. Cheese


    There is no public loss on interest paying short term liquidity loans from the Fed.
  5. Excellent point.
  6. Yeah, but not when the interst is 1%. The public loss is inflation.

    If things are really that bad, more loans is not the answer!
  7. that deserves a LOL
  8. What are people complaining about?

    Now that people are broke, Paulsen and Bernanke are fixing the mortgage lending rules.

    Isn't that enough?
  9. JPM did a pretty good job of sidestepping all the cow turds that were out there. It will be intersesting how this shakes out 6 months from now. Is the bear the only time bomb out there? I tend to doubt it, but if there are only 1 or 2 others who knows?
  10. new$


    "We don't make no mistakes around here boy"
    #10     Mar 14, 2008