Bear Stearns Sells for $2 a Share, $236.2 million

[Chris_]

By JOE BEL BRUNO and MADLEN READ, AP Business Writers
NEW YORK - Just four days after Bear Stearns Chief Executive Alan Schwartz assured Wall Street that his company was not in trouble, he was forced on Sunday to sell the investment bank to competitor JPMorgan Chase for a bargain-basement price of $2 a share, or $236.2 million.

The stunning last-minute buyout was aimed at averting a Bear Stearns bankruptcy and a spreading crisis of confidence in the global financial system sparked by the collapse in the subprime mortgage market. Bear Stearns was the most exposed to risky bets on the loans; it is now the first major bank to be undone by that market's collapse.

The Federal Reserve and the U.S. government swiftly approved the all-stock buyout, showing the urgency of completing the deal before world markets opened. The Fed also essentially made the takeover risk-free by saying it would guarantee up to $30 billion of the troubled mortgage and other assets that got the nation's fifth-largest investment bank into trouble.

"This is going to go down in very historic terms," said Peter Dunay, chief investment strategist for New York-based Meridian Equity Partners. "This is about credit being overextended, and how bad it is for major financial institutions and for individuals. This is why we're probably heading into a recession."

http://news.yahoo.com/s/ap/jpmorgan_bear_stearns

[USA4ME]

I wasn't involved with the Bears Stearns clean-up, but I heard enough about it from plenty of others.  What a mess!!

Other than that, we're in a recession but it's a election year so the books will never show it.  What was growth last quarter, something like 0.6%?  It'll be 0.3% or something this next time around, because if it comes in as true negative growth, they'll be readjusting the numbers and doing all sorts of interesting bookkeeping to make sure it doesn't show as a negative.

.

[Lauri]

ok, so if we're still growing, even by a teeny bit, is that truly a recession?

i asked about this in your GD thread about the Fed Reserve.. but I'm curious if we are or are not in one..

i think the markets cannot always grow, especially with how large our economy is.. there have to be plateaus in there, right?