The Market Hick

Let's Get Real About Bear Stearns

Prieur,

This is the soundest piece of reasoning I have read on the Fed Bailout of BSC. I love reading your articles on SA,please keep contributing.

Bear Stearns Firesale: Notes and Predictions

I'l tell you who to sue. Sue the Fed. This was extortion on the grandest scale I have ever witnessed in my 30 years of tracking the markets. The Fed freaked and the employees of BSC got royally screwed. I don't know what more evidence you need that the current Fed Reserve doesn't have a clue as to what's going on.If Hank Paulson ends up at JPM after his stint at Treasury ends(Probability 80%) it will be a clear sign that he's not out to help the US economy or its citizens.
The very fact that BSC is trading well above the offer price of BSC tells me something else about this deal.It was just a way of buying time for BSC and the financial markets to avoid a meltdown(probability 100%).BSC has a month to get its house in order then all the stockholders can vote down the deal,BSC continues on its own as if nothing has ever happened and the stock quickly recovers to the $30 level.All the assets previously marked down start to get repriced upward over a 2 year period and BSC is healthy again(probability 75%).Do you honestly think the employees of BSC want to take a bath like what they're looking at when they can find a way out?
You guys out there act like every mortgage is going to default-they're not and the ones(homes) that do will get quickly snapped up by investors,new mortgages will be written to sound credits.We don't have to make this S&L 80's^2.