It's officially released
Don't know about Redemption though...
Carpe Divitiae
Cesarnc's market talk, gossips, rumours & fun
- #6,402
- Mar 16, 2008 3:10pm Mar 16, 2008 3:10pm
- Joined Nov 2006 | Status: Shoot all the clowns.. Shoot'em all | 14,520 Posts
I smell an Oscar for this one
- #6,403
- Mar 16, 2008 4:34pm Mar 16, 2008 4:34pm
- Joined Jul 2007 | Status: Never Give In | 2,518 Posts
JP Morgan Offering $15-$20 A Share for Bear Stearns
JP MORGAN OFFERS $15-$20 A SHARE FOR BEAR STEARNS
By Charlie Gasparino, CNBC On-Air Editor
CNBC.com
| 16 Mar 2008 | 09:44 AM ET
JP Morgan Chase is offering to buy troubled investment bank Bear Stearns for between $15 and $20 a share, CNBC has learned.
Bear's board is currently meeting to discuss the proposal, which based on Bear's 118 million shares outstanding, would be valued at between $1.8 billion and $2.4 billion.
A deal in principle could be announced Sunday night, although the agreement would still need shareholder approval.
Here's what makes this a tricky situation: without shareholder approval, there is no real deal, so other banks and clients may be reluctant to deal with Bear on Monday unless it's part of a well capitalized JP Morgan.
Because of this, most executives inside Bear believe the Federal Reserve and Treasury will play some role in making sure there is a backstop if the shareholder approval isnt reached.
Of course, the deal itself could fall apart at the last minute, which would mean Bear would have to find another buyer, possibly JC Flowers.
An offer of $20 or less would be well below Bear's closing stock price of $30.85 on Friday, which was already down 47% for the day. As one senior Bear executive--who like most of the senior team is paid and continues to hold Bear stock--puts it: "based on the information i'm getting, lets just say I wont be retiring early."
A JP Morgan spokeswoman could not be reached for comment.
On Friday Bear Stearns , the fifth largest U.S. investment bank, said a cash crunch forced it to turn to the Federal Reserve and JPMorgan for emergency funds, intensifying fears of a widening global credit crisis and driving its shares down as much as 50 percent. It also stepped up efforts to find a buyer.
On the same day S&P lowered its long-term counterparty credit rating on Bear to "BBB" from "A," and it placed long-and short term ratings on credit watch with negative implications.
Because of that S&P downgrade, bankers came to the conclusion that a deal must be done by Monday morning because no one on the street will trade or lend to Bear Stearns, which is rated a notch above junk bond levels. If the downgrade hadn't happened, Bear management would have had more time to work the Street for a deal, sources said.
As reported earlier, Bear Steans department heads met with officials of JP Morgan and JC Flowers on Saturday afternoon to give an overview of Bear's business divisions, including headcount and profit and loss positions.
The deal will likely lead to massive layoffs at Bear as JP Morgan consolidates businesses. But Bear isnt alone.
Sources tell CNBC that CS First Boston will be cutting jobs this week in its investment banking department and big cuts are looming at Merrill Lynch , where middle managers are bracing for cuts of 10 percent across the board. Also sources say Lehman Bothers will likely be in for turbulence given its own holdings of risky commercial real estate bonds.
Bear, however, will dominate headlines on Monday. Aside from the financial fallout of a major firm disintegrating, there will likely be massive legal issues.
Executives inside Bear are bracing for major lawsuits from investors, and not just over the public comments made by the CEO Allen Schwartz and CFO Sam Molinaro to CNBC last week where they sought to calm the markets about Bear's financial status. There also is worry about lawsuits claiming general mismanagement of the firm by top executives, like Chairman Jimmy Cayne and others .
The biggest loser in all of this are the 14,000 employees of Bear. Employees own close to 25 percent of the firm, meaning top execs net worth has been nearly destroyed in recent months. And if the sale price is in the $15 to $20 a share range, these employees will be left with next to nothing.
2008 CNBC.com
URL: http://www.cnbc.com/id/23658905/
JP MORGAN OFFERS $15-$20 A SHARE FOR BEAR STEARNS
By Charlie Gasparino, CNBC On-Air Editor
CNBC.com
| 16 Mar 2008 | 09:44 AM ET
JP Morgan Chase is offering to buy troubled investment bank Bear Stearns for between $15 and $20 a share, CNBC has learned.
Bear's board is currently meeting to discuss the proposal, which based on Bear's 118 million shares outstanding, would be valued at between $1.8 billion and $2.4 billion.
A deal in principle could be announced Sunday night, although the agreement would still need shareholder approval.
Here's what makes this a tricky situation: without shareholder approval, there is no real deal, so other banks and clients may be reluctant to deal with Bear on Monday unless it's part of a well capitalized JP Morgan.
Because of this, most executives inside Bear believe the Federal Reserve and Treasury will play some role in making sure there is a backstop if the shareholder approval isnt reached.
Of course, the deal itself could fall apart at the last minute, which would mean Bear would have to find another buyer, possibly JC Flowers.
An offer of $20 or less would be well below Bear's closing stock price of $30.85 on Friday, which was already down 47% for the day. As one senior Bear executive--who like most of the senior team is paid and continues to hold Bear stock--puts it: "based on the information i'm getting, lets just say I wont be retiring early."
A JP Morgan spokeswoman could not be reached for comment.
On Friday Bear Stearns , the fifth largest U.S. investment bank, said a cash crunch forced it to turn to the Federal Reserve and JPMorgan for emergency funds, intensifying fears of a widening global credit crisis and driving its shares down as much as 50 percent. It also stepped up efforts to find a buyer.
On the same day S&P lowered its long-term counterparty credit rating on Bear to "BBB" from "A," and it placed long-and short term ratings on credit watch with negative implications.
Because of that S&P downgrade, bankers came to the conclusion that a deal must be done by Monday morning because no one on the street will trade or lend to Bear Stearns, which is rated a notch above junk bond levels. If the downgrade hadn't happened, Bear management would have had more time to work the Street for a deal, sources said.
As reported earlier, Bear Steans department heads met with officials of JP Morgan and JC Flowers on Saturday afternoon to give an overview of Bear's business divisions, including headcount and profit and loss positions.
The deal will likely lead to massive layoffs at Bear as JP Morgan consolidates businesses. But Bear isnt alone.
Sources tell CNBC that CS First Boston will be cutting jobs this week in its investment banking department and big cuts are looming at Merrill Lynch , where middle managers are bracing for cuts of 10 percent across the board. Also sources say Lehman Bothers will likely be in for turbulence given its own holdings of risky commercial real estate bonds.
Bear, however, will dominate headlines on Monday. Aside from the financial fallout of a major firm disintegrating, there will likely be massive legal issues.
Executives inside Bear are bracing for major lawsuits from investors, and not just over the public comments made by the CEO Allen Schwartz and CFO Sam Molinaro to CNBC last week where they sought to calm the markets about Bear's financial status. There also is worry about lawsuits claiming general mismanagement of the firm by top executives, like Chairman Jimmy Cayne and others .
The biggest loser in all of this are the 14,000 employees of Bear. Employees own close to 25 percent of the firm, meaning top execs net worth has been nearly destroyed in recent months. And if the sale price is in the $15 to $20 a share range, these employees will be left with next to nothing.
2008 CNBC.comURL: http://www.cnbc.com/id/23658905/
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- #6,404
- Mar 16, 2008 4:48pm Mar 16, 2008 4:48pm
- Joined Jul 2007 | Status: Never Give In | 2,518 Posts
Stocks face rocky ride with banks, Fed
updated 11:34 a.m. ET, Sun., March. 16, 2008
Reuters
updated 11:34 a.m. ET March 16, 2008
By Kristina Cooke
NEW YORK (Reuters) - The rocky ride for the U.S. stock market is likely to intensify this week with the survival of one of the biggest investment banks in doubt and regulators rapidly burning through options to limit more damage to the financial system.
All eyes will again be on Bear Stearns come Monday for any further word about the condition of the fifth-largest U.S. investment bank, which on Friday had to get emergency funding as fallout from the global credit crisis took its toll.
Bear Stearns is among four major Wall Street firms reporting earnings this week.
But the Federal Reserve's policy-setting meeting on Tuesday will be the highlight of the holiday-shortened week. The U.S. stock market will be closed for Good Friday.
U.S. interest-rate futures showed more than a 50 percent chance on Friday that the central bank will cut its benchmark fed funds rate target by 100 basis points this week to revive an economy that many say is already in recession.
"Most of the focus will be on the Federal Reserve. Will the Fed cut rates? And if so, how much? And most importantly, what will the statement that accompanies the decision say?" asked Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York. "Frankly, the Fed said it all in their bailout of Bear Stearns."
Market participants have questioned the effectiveness of the U.S. central bank's efforts. On Tuesday, March 11, the Fed teamed up with other central banks to get up to $200 billion in fresh funds to cash-starved markets. The market rallied sharply for its best day in five years, but most of the gains were gone by the end of the week.
Then on Friday, Bear Stearns said a cash crunch forced it to turn to the Federal Reserve and JPMorgan Chase for emergency funds. That revived investors' fears about the depth and breadth of the credit crunch. Bear's stock tumbled as much as 50 percent on Friday to a session low at $28.42, its lowest since October 1998.
The 28-day emergency line of funding for Bear Stearns came just days after Bear, which has been hard hit by its heavy exposure to the faltering U.S. mortgage market, had dismissed market rumors of a cash crunch and said it was still a healthy player in the global web of trading and finance.
That heightened concerns that there may be other banks facing liquidity issues.
BANKS IN THE KLIEG LIGHTS
More clarity about the extent of the write-downs may come when four big U.S. investment banks report results this week.
Bear Stearns is first out of the block on Monday, which happens to be St. Patrick's Day. Bear moved up its earnings release, which was initially scheduled for Thursday. The change in schedule may indicate that Bear plans to make a significant disclosure, said Rebecca Engmann Darst, an equity options analyst at Interactive Brokers Group.
"Speculation is rising that Bear Stearns could be the subject of a takeover or 'takeunder' over the weekend -- possibly with JPMorgan Chase," she added.
Lehman Brothers <LEH.N> and Goldman Sachs <GS.N> will report earnings on Tuesday, followed by Morgan Stanley <MS.N> on Wednesday.
On Friday, Lehman's stock was the second-biggest decliner among investment banks, falling 14.6 percent, or $6.73, to close at $39.26 on the New York Stock Exchange.
Forecasts and stock prices have come down sharply for all the big banks, as the credit crunch spreads across almost every market -- the contagion effect that Wall Street executives last year assured analysts was not happening.
S&P SKATES CLOSE TO THE BEAR (Bear, Skating....What a mix
With Friday's slide, the S&P 500 was close to falling into a bear market. If it drops further this week, it could cross a threshold that normally indicates a bear market, which would be a drop of 20 percent from its October closing high. The Nasdaq turned bearish last month.
The Dow Jones industrial average <.DJI> plunged 194.65 points, or 1.60 percent, to end on Friday at 11,951.09, with only one of the 30 Dow components -- Boeing Co. <BA.N> -- finishing higher. The Standard & Poor's 500 index <.SPX> fell 27.34 points, or 2.08 percent, to 1,288.14, and the Nasdaq Composite Index <.IXIC> lost 51.12 points, or 2.26 percent, to close at 2,212.49.
For the week, the Dow industrials gained 0.48 percent, thanks to Tuesday's huge rally. But the Standard & Poor's 500 index <.SPX> slipped 0.40 percent and the Nasdaq was unchanged -- right to the penny.
For the year, the Dow is down 9.90 percent, the S&P 500 is off 12.27 percent and the Nasdaq has lost 16.58 percent.
WHAT A WEEK
It was a wild week, starting with Monday's story in The New York Times that New York Gov. Eliot Spitzer had patronized a $1,000-an-hour prostitute. The reaction to his downfall was gleeful on Wall Street, where Spitzer had zealously prosecuted wrongdoing during his years as New York state's attorney general. On Wednesday, most traders had their TVs tuned in to watch the live broadcasts of Spitzer's resignation.
On Thursday, U.S. crude oil futures hit a record high of $111 a barrel and gold jumped to a record $1,000 an ounce while the dollar sank to record lows against the euro.
By Friday morning, the governor's scandal seemed like a distant memory when news broke about Bear Stearns' liquidity crisis. The dollar fell below 99 yen to 98.91, its lowest in 12-1/2 years; the euro hit $1.5688, a record high after Bear Stearns was forced to get emergency funding.
Wall Street's fear barometer, the Chicago Board Options Exchange Volatility Index <.VIX>, or VIX, jumped 14.2 percent on Friday to end at 31.16, its best close since March 2003. (Best close for a Fear Index?)
Investors piled into bonds, driving the price of the 10-year U.S. Treasury note up 22/32 and pushing its yield down to 3.44 percent from 3.53 percent on Thursday.
PPI, HOUSING AND RECESSION
Among the coming week's key economic data will be the U.S. Producer Price Index on Tuesday, which will get plenty of attention due to concerns about rising inflation even as the economy slows. Economists polled by Reuters expect February core PPI, excluding volatile food and energy prices, to rise 0.2 percent. In January, core PPI gained 0.4 percent.
On Friday, a government report unexpectedly showed February's Consumer Price Index, another top inflation gauge, was unchanged. While that leaves more room for the Federal Reserve to cut interest rates, analysts were skeptical about the tame inflation picture painted by the data because prices of oil, gold and other commodities recently hit record highs.
Wall Street will get some other economic data this week that could give more clues about the U.S. economy's health, with industrial production and capacity utilization due Monday and February housing starts set for Tuesday.
Weekly jobless claims and a March index of regional business activity from the Federal Reserve Bank of Philadelphia will round out the economic week on Thursday.
Wall Street will have one thing in mind as it watches the week's stream of numbers, Johnson said.
"The question is: Did the economy enter a recession in February? We will get an answer to that question when we see the industrial production and housing numbers," he said.
(Additional reporting by Justin Grant and Doris Frankel; Editing by Jan Paschal)
Copyright 2008 Reuters. Click for restrictions.
URL: http://www.cnbc.com/id/23526942/for/cnbc/
updated 11:34 a.m. ET, Sun., March. 16, 2008
Reuters
updated 11:34 a.m. ET March 16, 2008
By Kristina Cooke
NEW YORK (Reuters) - The rocky ride for the U.S. stock market is likely to intensify this week with the survival of one of the biggest investment banks in doubt and regulators rapidly burning through options to limit more damage to the financial system.
All eyes will again be on Bear Stearns come Monday for any further word about the condition of the fifth-largest U.S. investment bank, which on Friday had to get emergency funding as fallout from the global credit crisis took its toll.
Bear Stearns is among four major Wall Street firms reporting earnings this week.
But the Federal Reserve's policy-setting meeting on Tuesday will be the highlight of the holiday-shortened week. The U.S. stock market will be closed for Good Friday.
U.S. interest-rate futures showed more than a 50 percent chance on Friday that the central bank will cut its benchmark fed funds rate target by 100 basis points this week to revive an economy that many say is already in recession.
"Most of the focus will be on the Federal Reserve. Will the Fed cut rates? And if so, how much? And most importantly, what will the statement that accompanies the decision say?" asked Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York. "Frankly, the Fed said it all in their bailout of Bear Stearns."
Market participants have questioned the effectiveness of the U.S. central bank's efforts. On Tuesday, March 11, the Fed teamed up with other central banks to get up to $200 billion in fresh funds to cash-starved markets. The market rallied sharply for its best day in five years, but most of the gains were gone by the end of the week.
Then on Friday, Bear Stearns said a cash crunch forced it to turn to the Federal Reserve and JPMorgan Chase for emergency funds. That revived investors' fears about the depth and breadth of the credit crunch. Bear's stock tumbled as much as 50 percent on Friday to a session low at $28.42, its lowest since October 1998.
The 28-day emergency line of funding for Bear Stearns came just days after Bear, which has been hard hit by its heavy exposure to the faltering U.S. mortgage market, had dismissed market rumors of a cash crunch and said it was still a healthy player in the global web of trading and finance.
That heightened concerns that there may be other banks facing liquidity issues.
BANKS IN THE KLIEG LIGHTS
More clarity about the extent of the write-downs may come when four big U.S. investment banks report results this week.
Bear Stearns is first out of the block on Monday, which happens to be St. Patrick's Day. Bear moved up its earnings release, which was initially scheduled for Thursday. The change in schedule may indicate that Bear plans to make a significant disclosure, said Rebecca Engmann Darst, an equity options analyst at Interactive Brokers Group.
"Speculation is rising that Bear Stearns could be the subject of a takeover or 'takeunder' over the weekend -- possibly with JPMorgan Chase," she added.
Lehman Brothers <LEH.N> and Goldman Sachs <GS.N> will report earnings on Tuesday, followed by Morgan Stanley <MS.N> on Wednesday.
On Friday, Lehman's stock was the second-biggest decliner among investment banks, falling 14.6 percent, or $6.73, to close at $39.26 on the New York Stock Exchange.
Forecasts and stock prices have come down sharply for all the big banks, as the credit crunch spreads across almost every market -- the contagion effect that Wall Street executives last year assured analysts was not happening.
S&P SKATES CLOSE TO THE BEAR (Bear, Skating....What a mix
With Friday's slide, the S&P 500 was close to falling into a bear market. If it drops further this week, it could cross a threshold that normally indicates a bear market, which would be a drop of 20 percent from its October closing high. The Nasdaq turned bearish last month.
The Dow Jones industrial average <.DJI> plunged 194.65 points, or 1.60 percent, to end on Friday at 11,951.09, with only one of the 30 Dow components -- Boeing Co. <BA.N> -- finishing higher. The Standard & Poor's 500 index <.SPX> fell 27.34 points, or 2.08 percent, to 1,288.14, and the Nasdaq Composite Index <.IXIC> lost 51.12 points, or 2.26 percent, to close at 2,212.49.
For the week, the Dow industrials gained 0.48 percent, thanks to Tuesday's huge rally. But the Standard & Poor's 500 index <.SPX> slipped 0.40 percent and the Nasdaq was unchanged -- right to the penny.
For the year, the Dow is down 9.90 percent, the S&P 500 is off 12.27 percent and the Nasdaq has lost 16.58 percent.
WHAT A WEEK
It was a wild week, starting with Monday's story in The New York Times that New York Gov. Eliot Spitzer had patronized a $1,000-an-hour prostitute. The reaction to his downfall was gleeful on Wall Street, where Spitzer had zealously prosecuted wrongdoing during his years as New York state's attorney general. On Wednesday, most traders had their TVs tuned in to watch the live broadcasts of Spitzer's resignation.
On Thursday, U.S. crude oil futures hit a record high of $111 a barrel and gold jumped to a record $1,000 an ounce while the dollar sank to record lows against the euro.
By Friday morning, the governor's scandal seemed like a distant memory when news broke about Bear Stearns' liquidity crisis. The dollar fell below 99 yen to 98.91, its lowest in 12-1/2 years; the euro hit $1.5688, a record high after Bear Stearns was forced to get emergency funding.
Wall Street's fear barometer, the Chicago Board Options Exchange Volatility Index <.VIX>, or VIX, jumped 14.2 percent on Friday to end at 31.16, its best close since March 2003. (Best close for a Fear Index?)
Investors piled into bonds, driving the price of the 10-year U.S. Treasury note up 22/32 and pushing its yield down to 3.44 percent from 3.53 percent on Thursday.
PPI, HOUSING AND RECESSION
Among the coming week's key economic data will be the U.S. Producer Price Index on Tuesday, which will get plenty of attention due to concerns about rising inflation even as the economy slows. Economists polled by Reuters expect February core PPI, excluding volatile food and energy prices, to rise 0.2 percent. In January, core PPI gained 0.4 percent.
On Friday, a government report unexpectedly showed February's Consumer Price Index, another top inflation gauge, was unchanged. While that leaves more room for the Federal Reserve to cut interest rates, analysts were skeptical about the tame inflation picture painted by the data because prices of oil, gold and other commodities recently hit record highs.
Wall Street will get some other economic data this week that could give more clues about the U.S. economy's health, with industrial production and capacity utilization due Monday and February housing starts set for Tuesday.
Weekly jobless claims and a March index of regional business activity from the Federal Reserve Bank of Philadelphia will round out the economic week on Thursday.
Wall Street will have one thing in mind as it watches the week's stream of numbers, Johnson said.
"The question is: Did the economy enter a recession in February? We will get an answer to that question when we see the industrial production and housing numbers," he said.
(Additional reporting by Justin Grant and Doris Frankel; Editing by Jan Paschal)
Copyright 2008 Reuters. Click for restrictions.
URL: http://www.cnbc.com/id/23526942/for/cnbc/
Humble Lifetime Member
- #6,405
- Mar 16, 2008 4:51pm Mar 16, 2008 4:51pm
- Joined Jul 2007 | Status: Never Give In | 2,518 Posts
EURO on Steroids 
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- #6,406
- Mar 16, 2008 6:44pm Mar 16, 2008 6:44pm
- | Joined Mar 2007 | Status: Fundamentally Technical | 4,446 Posts
EURO on Steroids
Patience + Humility + Study = Success
- #6,409
- Mar 16, 2008 8:20pm Mar 16, 2008 8:20pm
- Joined Mar 2006 | Status: Trade the reaction not the news! | 10,359 Posts
- #6,410
- Mar 16, 2008 8:22pm Mar 16, 2008 8:22pm
- Joined Apr 2007 | Status: RCMM (Risk Analysis Money Manager) | 2,556 Posts
- #6,413
- Mar 16, 2008 11:14pm Mar 16, 2008 11:14pm
- | Joined Mar 2007 | Status: Fundamentally Technical | 4,446 Posts
WAKE UP!!!!!
U guys would miss the sell off goes panic goes chaos goes fiasco..
I know i missed the train
just in Aus' thread
Patience + Humility + Study = Success
- #6,414
- Mar 17, 2008 2:15am Mar 17, 2008 2:15am
- Joined Jul 2007 | Status: Never Give In | 2,518 Posts
I wake up and find the world has gone mad.
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- #6,415
- Mar 17, 2008 2:16am Mar 17, 2008 2:16am
- | Joined Mar 2007 | Status: Fundamentally Technical | 4,446 Posts
I wake up and find the world has gone logical.
There, I fixed it for you
Patience + Humility + Study = Success
- #6,416
- Mar 17, 2008 2:20am Mar 17, 2008 2:20am
- Joined Jul 2007 | Status: Never Give In | 2,518 Posts
There, I fixed it for you
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- #6,417
- Mar 17, 2008 2:25am Mar 17, 2008 2:25am
- | Joined Mar 2007 | Status: Fundamentally Technical | 4,446 Posts
Looks like we're bottoming for now, then sell those rallies
Patience + Humility + Study = Success
- #6,418
- Edited 2:31am Mar 17, 2008 2:30am | Edited 2:31am
- Joined Jul 2007 | Status: Never Give In | 2,518 Posts
Looks like we're bottoming for now, then sell those rallies
Rumors were that JP Morgan were buying Bear Sterns for aroun $15-$20 and now I find out it's about $2. All those Billionaire investors, well, are no longer billionaires. The Bright side is that they are millionaires. could have been worse, Zeroaires.
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- #6,419
- Mar 17, 2008 2:51am Mar 17, 2008 2:51am
- | Joined Mar 2007 | Status: Fundamentally Technical | 4,446 Posts
You know things are bad when wire services are begging for "CB Intervention"
The cavalry ain't coming gents
The cavalry ain't coming gents
Patience + Humility + Study = Success
- #6,420
- Mar 17, 2008 3:04am Mar 17, 2008 3:04am
- Joined Jul 2007 | Status: Never Give In | 2,518 Posts
You know things are bad when wire services are begging for "CB Intervention"
The cavalry ain't coming gents
Wasn't the CEO of Fannie Mae that said "this is the worst housing crisis since the Great Depression"???? Something to think about.
Things are really bad, much "bad" than your "Bad". How "bad" can it get? Would you enlightening us?
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