Don't Expect Other Bidders for Bear - Certainly Not Buffett

There will be no other bidders for Bear, but there's always some chance JP Morgan might bump their offer a bit to get the deal done -- hence, the stock trading above $2.

There will also almost certainly be rumors galore about Buffett looking at buying Bear, which is a hoot. He wouldn't go within 1,000 miles of this black box.

Just read Buffett's 2002 annual letter (in which he warned about derivatives being "financial weapons of mass destruction") and ask yourself why the world's richest man would ever take the risk and headache of dealing with something 100x worse than Gen Re Securities...

Comments

[lance2210:]

Dear Whitney, always on the money. If Saloman Bros was a bomb, Bear is the thermonuclear device. Why would Warren want to devote his energy on a basket case when he can stick something boring like railcars (Marmon Industries).

2008 Mar 18 07:22 AM

[Rubens Morse:]

I never expected Buffett to bid for Bear. It appears that no other U.S. institution was big or fast enough to swallow Bear. European ones, especially Deutsche Bank, considered bidding, the problem is that the Fed would not give to non-U.S. firms the 'support' ($30 billion non-recourse loan on mortgage securities) it gave to JP Morgan. And of course, absent that 'support', no European could make a bid more competitive that the one from JP Morgan.

2008 Mar 25 11:18 AM