ss01's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/163007/comments http://seekingalpha.com/article/112479-gmac-why-the-bond-exchange-silence?source=feed#comment-341007 341007 The deal is done. Clearly the bondholders didn't stump up enough so the Fed came up with $5B + $1B to be invested through GM. It's preferred shares with an 8% div which isn't nearly enough of a deal. Rip-off city again. I'd guess the markets will love this one tomorrow.]]> Mon, 29 Dec 2008 21:57:02 -0500 The deal is done. Clearly the bondholders didn't stump up enough so the Fed came up with $5B + $1B to be invested through GM. It's preferred shares with an 8% div which isn't nearly enough of a deal. Rip-off city again. I'd guess the markets will love this one tomorrow.]]> http://seekingalpha.com/article/69263-bear-stearns-shareholder-math?source=feed#comment-128967 128967 Wed, 19 Mar 2008 16:05:21 -0400 http://seekingalpha.com/article/69204-why-is-bear-stearns-stock-rallying?source=feed#comment-128934 128934
That's not to say it was the wrong solution at the time. I don't think anyone outside of a few people at BS and JPM know what the real consequences would have been. Obviously, as Paul Volker says, the Fed took a judgment that the consequences as they understood them weren't worth the risk. It does set a terrible precedent with respect to debt holders though. ]]> Wed, 19 Mar 2008 15:02:38 -0400
That's not to say it was the wrong solution at the time. I don't think anyone outside of a few people at BS and JPM know what the real consequences would have been. Obviously, as Paul Volker says, the Fed took a judgment that the consequences as they understood them weren't worth the risk. It does set a terrible precedent with respect to debt holders though. ]]> http://seekingalpha.com/article/69261-fannie-and-freddie-get-a-little-breathing-room?source=feed#comment-128921 128921 1. It's solvency and leverage -- not liquidity -- that's the real issue.

2. I really don't see why more leverage on a small increase in equity is a good thing given the above.

3. They both wrote off billions and admit they have billions more to write off.

What am I missing that would suggest that that they are soundly managed and should be entrusted with more funds to manage makes the slightest sense? This is just more money for a bailout of lenders as far as I can tell. ]]> Wed, 19 Mar 2008 14:45:20 -0400 1. It's solvency and leverage -- not liquidity -- that's the real issue.

2. I really don't see why more leverage on a small increase in equity is a good thing given the above.

3. They both wrote off billions and admit they have billions more to write off.

What am I missing that would suggest that that they are soundly managed and should be entrusted with more funds to manage makes the slightest sense? This is just more money for a bailout of lenders as far as I can tell. ]]> http://seekingalpha.com/article/69082-explaining-bear-stearns-current-7-price?source=feed#comment-128893 128893
Yes Voters:
1. JPM could buy the shares themselves up to some price to insure the deal.

No Voters:
1. CDS owners would certainly buy to prevent a default.
2. BS shareholders on sentiment that it's a raw deal.
3. Other potential acquirers -- although I agree this is a low probability event unless the valuation is way off.


Indifferent:
1. Momentum traders knowing this could climb on board accentuating the move.
2. Option MM's hedging the above. ]]> Wed, 19 Mar 2008 13:51:56 -0400
Yes Voters:
1. JPM could buy the shares themselves up to some price to insure the deal.

No Voters:
1. CDS owners would certainly buy to prevent a default.
2. BS shareholders on sentiment that it's a raw deal.
3. Other potential acquirers -- although I agree this is a low probability event unless the valuation is way off.


Indifferent:
1. Momentum traders knowing this could climb on board accentuating the move.
2. Option MM's hedging the above. ]]> http://seekingalpha.com/article/69106-explaining-the-bear-stearns-share-price?source=feed#comment-128876 128876
It's worth it to JPM to buy equity in over $2 as the actual value of BS assets is somewhere north of that. They have to buy in enough stock to make the approval happen and there is a price up to which they will do so -- either in value or securing enough votes. . ]]> Wed, 19 Mar 2008 13:34:30 -0400
It's worth it to JPM to buy equity in over $2 as the actual value of BS assets is somewhere north of that. They have to buy in enough stock to make the approval happen and there is a price up to which they will do so -- either in value or securing enough votes. . ]]> http://seekingalpha.com/article/69107-why-is-bear-stearns-trading-above-deal-price?source=feed#comment-128627 128627
The Bondholders do indeed need this deal to appear to be going through for long enough to liquidate at the least. They are the one's at whom yelling "moral hazard" would seem appropriate. Is there a liquid market in BS bonds right now? I know the ones I saw gained back $.35 on the dollar after the announcement -- bringing them mighty close to par at any rate. In any event, it "might" be a hedge if BS shareholders don't end up cratering the company if they refuse the deal. Remember JPM gets the building if they want it and can buy 20% of the company for $2/share if that happens. It's going to be hard to find an alternative -- other than the FED of course.

]]> Wed, 19 Mar 2008 01:06:59 -0400
The Bondholders do indeed need this deal to appear to be going through for long enough to liquidate at the least. They are the one's at whom yelling "moral hazard" would seem appropriate. Is there a liquid market in BS bonds right now? I know the ones I saw gained back $.35 on the dollar after the announcement -- bringing them mighty close to par at any rate. In any event, it "might" be a hedge if BS shareholders don't end up cratering the company if they refuse the deal. Remember JPM gets the building if they want it and can buy 20% of the company for $2/share if that happens. It's going to be hard to find an alternative -- other than the FED of course.

]]> http://seekingalpha.com/article/68718-two-dollars-per-share-or-an-orderly-liquidation?source=feed#comment-127659 127659 Mon, 17 Mar 2008 11:30:22 -0400 http://seekingalpha.com/article/68161-asking-too-much-from-the-fed?source=feed#comment-125509 125509 Wed, 12 Mar 2008 09:19:07 -0400