JP Morgan to Buy Bear Stearns for Two Dollars a Share
The original intent for creating Hedge Fund Crash in August of 2007 was to establish a site to record what I was anticipating for the future — a hedge fund, or leveraged money, led collapse of the US and global economy. While financial markets were surging higher day after day just below the layers of optimism and greed the underpinnings of the financial system were beginning to demonstrate signs of distress.
This past week was sort of a confirmation of my ‘visions” of the future and was further topped off today with news that JP Morgan has agreed to purchase venerable American financial institution for two dollars per share, $28 or 93% lower than BSC’s closing price on Friday, in an effort to bail out the collapsing company.
The “penny stockification” and acquisition of Bear is not the only news. In an unprecedented move, the Federal Reserve has also agreed to guarantee up to thirty billion of Bear’s most illiquid assets.
We are now entering a brave new world where the U.S. government, through the Federal Reserve, is willing to underwrite risk in an effort to stabilize the collapsing credit markets.
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