Readings: Commodity charts, Bear Stearns rescue, BSMA sales
- Bespoke: Bespoke’s Commodity Snapshot
- InvestorsInsight: Let’s Get Real About Bear
The $2 a share offer is simply to keep Bear from having to declare bankruptcy which would mean a long, drawn out process and would have precipitated a crisis of unimaginable proportions. Cue the lawyers.
As I understand this morning, JP Morgan will take a $6 billion write down, which is essentially what they are paying for Bear. The Fed is taking $30 billion dollars in a variety of assets. They may ultimately take a loss of a few billion dollars over time, although they may actually make a profit.
The stock market would have crashed by 20% or more, maybe a lot more. It would have made Black Monday in 1987 look like a picnic. We would have seen tens of trillions of dollars wiped out in equity holdings all over the world.
- Economic Times: Bear Stearns sells local stocks worth Rs 1k cr
Bulk deals data on NSE indicate that BSMA (the FII arm of Bear Stearns that is registered with Sebi) sold shares worth more than Rs 1,000 crore on Friday and Monday to different entities, including Deutsche Securities, Citigroup, Merrill Lynch and Goldman Sachs Investments.
Bear Stearns holds tiny stakes in close to 120 listed Indian companies, with the largest holding in JP Associates (at $150 million) and significant stakes in Jindal Steel & Power ($88 million). It also holds shares worth $28 million in Opto Circuits and Madhucon Projects.
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