Roger Ehrenberg

Did JP Morgan Overpay For Bear Stearns?

fxtrader07, your comment is emotional, populist drivel. JPM doesn't have a put back on the deal. They are assuming it all - the good, the bad and the ugly, with a margin of safety provided by the Fed. Your value of the building comment is inane, because you can't strip out an asset from the analysis and compare it to the acquisition consideration. As I wrote in my post, it is about the true assessment of hard book value taking into account the factors mentioned. So a guarantee is not what JPM received. Repeat, not a guarantee.

This isn't the result of a cabal; it is the work of a Fed and a Treasury that is completely at a loss about what to do. They are not acting out of malice - they are acting out of fear. I know you think you and Mr. Paul have all the answers, but I guarantee that you do not. While I am not happy with many if not most of the Fed's actions over the past six months, they can hardly be chided for trying to act quickly and decisively to stem the ripple effect of the failure of a bulge-bracket firm. With trillions of dollars of interconnected transactions in the swaps and credit derivatives markets, taking them out of the picture would leave a lot of loose ends.