Mortgages and the credit crisis are at the core of everything that will happen in this country for the next several years. There is really no two ways about it. I have found that it is useful to discuss these matters with people in a wide variety of discipline and professional field before coming to an opinion of my own.
This last rate cut by the Federal Reserve combined with the move to shore up the investment of JP Morgan as it raided Bear Stearns is absolutely frightening. I would recommend that any one who has them time, the interest and the money, to invest in a good insider trading tool like the ones offered by Insider Score. This tool lets you look into the guts of SEC filings and see what the insiders think about their company.
The idea that the government would allow the Bear Stearns transaction to occur without allowing the market to respond was terrible for the shareholders that were locked out of the process. The banks were the sole beneficiaries of this action. A sell off on businesses that made bad investments is a correction. The government guaranteed the riskiest part of the Bear portfolio and hand the the treasure trove over to JP Morgan. for the good of the market. This was for the good of the bankers and a few insiders and really no one else. Especially, no the $2/share shareholder, that had no ability to negotiate anything. What would bear have been worth if the market had responded to the guaranteed subprime holding portfolio? Not, $2/share. Not by a long shot.
The Bear Stearns name is worth more than $236M dollars - not to mention the trade connections that the professionals staff had developed and maintained. The shareholders got robbed.
My hats off to JP Morgan. I wonder when the shareholder's will sue? Good luck, suing the Fed.Labels: Bear Stearns, corporate raid, federal reserve |
