Bear Stearns Selling, Fed Rate Cut, and CNBC Streaming Live
A Sunday (discount) rate cut came out today after the announcement that is buying Bear Stearns for a pittance as the company is on the verge of collapse.
JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. for about $240 million, less than a 10th of its value last week, after a run on the company ended 85 years of independence for Wall Street’s fifth-largest securities firm.
Shareholders of New York-based Bear Stearns will get stock in JPMorgan equivalent to about $2 a share, compared with $30 at the close on March 14, the two companies said in a statement today. The U.S. Federal Reserve will provide financing for the transaction, including support for as much as $30 billion of Bear Stearns’s “less-liquid assets.” via Bloomberg
Meanwhile expectation of another rate cut is expected Tuesday from the Federal Reserve.
Whatever the decision, for a growing number of analysts, one more rate reduction will not be the lifeline that pulls the country back from the brink of the first recession since 2001.
Experts in this camp believe the economy is shrinking now because of the fallout from the housing and credit debacles. Businesses are shedding jobs, Wall Street is convulsing, energy prices are skyrocketing and people are reluctant to spend. Yet these economists say lower interest rates should help cushion the blows of a recession.
“Many consumers, businesses and investors are simply running scared right now,” economic consultant Carl Tannenbaum said. via the AP
One interesting thing if you are stuck in the office, CNBC is streaming live so you can watch the market gyrations from the office today.
Click here to watch CNBC live over the internet.
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Great to hear that the big boys
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most think.
Thanks for the value! 
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Comment by www.thesarasotadeed.com on 16 March 2008:
Wow! Interesting to see how big business isn’t sustainable in the slowing economy either.. Not just the small players that are hurting.. I hope Microsoft & Dell stay in the game though.. I want to keep reading your articles and need an internet connection to do so..
Comment by foreclosurefish on 17 March 2008:
In this kind of environment, I’m not sure how much another rate cut will do. Energy prices are skyrocketing because rates are down and the value of the dollar is eroding, which means that oil-exporting countries want more dollars for their oil.
Taking even more value out of the dollar will not stimulate much additional spending that won’t just be used to pay even higher energy costs. Growth will continue to stagnate, and more rate cuts will be called for, which will push up energy costs…. and so on.
Ahh, the problems of self-reinforcing positive feedback loops!
http://www.thesarasotadeed.com: Bear Stearn’s collapse is more a sign to me that “Enronizing” mortgage debt is a very bad game to be in. If Microsoft and Dell have limited their exposure to such dodgy debts, then I think we’ll be able to read more articles online for the near future
Comment by Causic on 10 October 2008:
Banks need to be able to loan to other banks without fear of loss. We need to take back the process of making money by repealing the federal reserve act of 1913 and make our own money instead of leaving them to make it for us then charging us interest for it. The Federal Reserve is not a government department as most of you know. It is a private bank. Then you talk about middle class tax breaks? You could just let every blue collar average working man know that the IRS has no law that allows them to Tax average working class America. There you go.. Now us average Joes have a bit more to spend. Oh and don’t forget about the Amero!! It’s on the market and just might be all our savors before to long.. If you do not know what that is then Google it. I am all for it!! In a way all this bail out fake spending and creation of trillions of American dollars will only serve to weaken the worth of the dollar. This by it’s self should cause the cost of everything to go thru the roof. Then when the alternative is better (Amero) than our current condition…. we will all make the change over to the stronger Amero … with incentives of course. There are some hard times a comin. But we will brave this man made storm of course and be in a better position to advance as a global community. Remember: Your bussiness could have been a cash based one.. You got sucked into advancing faster that your means. This goes for bother corp america and small business. There are those out there that are not going to feel as much of a pinch over all this because they stay within their means. There really is nothing you need that fast or badly you have to get it on credit. Of course It wasn’t just us making bad chioces; we listened to the market tell us “it’s ok! it’s normal to use credit in business and peronal lives for EVERYTING.” Sleeping with bugs will get you bit.