Wall Street Addict

JPMorgan Chase said Sunday it will acquire rival Bear Stearns for a bargain-basement $236.2 million - or $2 a share - a stunning collapse for one of the world's largest and most storied investment banks.
The last-minute buyout was aimed at averting a Bear Stearns bankruptcy and a spreading crisis of confidence in the global financial system.
"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."
At almost the same time as the deal for control of Bear Stearns was announced, the Federal Reserve said it approved a cut in its lending rate to banks to 3.25 percent from 3.50 percent and created another lending facility for big investment banks. The central bank's official meeting is on Tuesday. Before the emergency move to lower the discount rate, which is the rate at which banks lend each other money, the Fed was widely expected to again cut its headline rate by as much as a full point to 2 percent.
Why is there such urgency to hold a weekend meeting to cut this important rate. There is no question that there are way more problems on the street than what is being publicized in the media. Tomorrow will mark the day when all of my dollars will be converted to Euros. Best of luck this week in the markets. May God be with us.

Labels: Bear Sterns, Bear Sterns Bankruptcy, BSC, Credit Crisis, Emergency Cut, Federal Reserve, JP Morgan Chase And Co., JPM, Rate Cut