Hat tip to Sox First blog for the photo and some ideas.
So yada yada, the whole financial world is rocked by the sudden and surprising dissolution of Bear Stearns yesterday. The deal must have been hush hush, most of the employees had no idea. And is it any wonder? They own 30% of the stock.
So now what? JP Morgan bought them out. For 2$ a share, what a lark! Now I don't know nothin'. But explain to me, why JP Morgan would buy a company that is leveraged out the ass in Prime Mortgages? Isn't that the whole cause of the meltdown? Do they think it's going to get better soon? Afterall, with thousands losing their jobs, it certainly won't be increasing the budget of middle America. Personally, I can't see how things will recover until we can start moving money into the hands of the people who really control the market, namely the consumer. Some of my favorite blogconomists have been predicting this fall for a full year. And it just seems once again, like the really smart powerful players all missed the party. I mean...come on! Ponzi sound great if you can get out before the house of cards collapses. But when you're a bank--you don't ever get out. Not if you don't want to screw over every single client you have.
Well, at any rate, it isn't for me to moralize on a subject I barely understand. I am dead curious about the fallout of this. Some are predicting bigger losses for the other financial houses. Will Merrill start divesting? Will Deloitte and Touche be tarnished? PWC? AM New York said that the city will feel this. but really, will it. One thing's for sure, there's a whole lotta real estate opening up in midtown.