What is going on at Bear Stearns ?

As a fallout of this, we will see new changes
The plan would give major new powers to the Federal Reserve, according to a 22-page executive summary obtained by The Associated Press.
The Fed would be given broad authority to oversee financial market stability. That would include new powers to examine the books of any institution deemed to represent a potential threat to the proper functioning of the overall financial system.
The proposal, which will be outlined Monday in a speech by Treasury Secretary Henry Paulson, is certain to set off heated debates within different sectors of the financial services industry and in Congress, where some Democrats are likely to complain that the proposal does not go far enough to crack down on abuses.
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New Hunger for Risk Stirs A Quarter-Opening Rally

May the liquidity be with us ! Let there be more hiring ! Please end this crisis.
U.S. Stocks Rise in S&P 500's Best 2nd Quarter Start Since 1938
Investors embraced risk Tuesday, bidding shares sharply higher and unloading safe havens like Treasury bonds and gold to begin 2008's second quarter with a bang.
The market's swings were based largely on the idea that Wall Street's credit crunch is nearing an end. New announcements of write-downs at two major European banks were interpreted by many traders and everyday investors as confirmation that the bloodletting will soon be out of the way.
The Dow Jones Industrial Average jumped 391.47 points, soaring 3.2%, to end at 12654.36.
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The market's getting a little more comfortable that the crisis is over
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Bear Stearns employees miss out on JPMorgan jobs

[FONT=verdana,arial,helvetica][/FONT]JPMorgan has announced its first top-level management jobs since reaching an agreement on March 16 to merge with troubled Bear Stearns, reports Reuters. But of 26 executives named to executive positions in the investment banking and trading division, only five are from Bear Stearns. Business line executives are expected to announce the next level of management decisions by mid-April. Recruiters are already reporting a surge in the number of CVs being received from Bear employees.
 
Here is the NYT story on the fate of new graduates who got their internship and full time offers rescinded from Bear Stearns
http://www.nytimes.com/2008/04/19/business/19bear.html
Before disaster struck, Bear Stearns — one of the most prestigious employers in campus career offices — signed on about 300 undergraduates and M.B.A.’s for full-time positions and about 300 interns for the summer. But those offers were thrown into question in March, when the 85-year-old company, undone by what amounted to a bank run, agreed to be acquired by JPMorgan in a controversial deal brokered by the federal government.
The students’ fate depended on which corner of Bear they were going to join. Those who had signed on in the equities, banking and fixed-income divisions generally lost their jobs. Those who had joined in the energy, prime brokerage and merchant banking division will go to work for JPMorgan.

And JPMorgan is offering the student recruits consolation prizes, provided they play by its rules. They can keep hefty signing bonuses that Bear promised them — $10,000 for college seniors, and about $50,000 for M.B.A. students — if they sign contracts in which they agree not to sue the bank over their rescinded jobs. If they do not sign, JPMorgan says, they cannot keep the money, which many of the students received last fall.
JPMorgan is also offering to let the students use its career counseling center, where they can hone interview skills and brush up résumés. The bank will pay students who accepted summer internships at Bear Stearns, putting some to work in its own divisions and others to work at charities.
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Morgan Stanley rumors

I am hearing rumors that Morgan had to go to the Discount window.

CNBC reporting LEH going to Korea for cash infusion.

Looks like round 2 of the credit crisis starting.
 
Where there's smoke, there's fire, it always seems...
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What is that supposed to mean?

This is yet another example in which the "coverup" is worse than the "crime". However, I think I would need a lot of convincing that these guys did anything criminal.
 
I agree with Doug. Unless I see some real facts, I think this is all noise to quite the crowd and nothing substantial.
 
alain said:
Some interesting article about Bear

Bringing Down Bear Stearns: Politics & Power: vanityfair.com
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If this is the case, then the power of information cascades are truly a marvel to behold. To just say a few words in the right places, put some energy behind them, and get them going...

And then blow up the fifth largest investment bank.

That...is what you call power. To create a self-fulfilling prophecy out of thin air and to literally make a...killing...for lack of better terms practically overnight.

I wonder what other kind of things you can do with such power...

I believe one man said it best:

"The illusion has become reality, and the more real it becomes, the more they want it. Capitalism at its finest."

How right you are, Gordon Gekko.
 
I walked by Bear Stearns building a few days ago, looked up and everywhere there used to say Bear Stearns, now say JP Morgan. All the trace of BS are now gone forever.
If someone who never visited that building before, they would have no idea walking by the building that it used to be the headquarter of the fifth largest investment bank on Wall Street.
 
Yeah, I was surprised too when I passed by the building this week that they've changed name on every entrance.

They should've named company Bull Stearns, because Bear is not really good name in finance :)
 
In my opinion, Bear's demise is the most important financial event in the last 10 years. It is a bit higher than the LTCM fall.

I guess in a few years, we will read a book similar to "When genius failed" about Bear ...

By the way, how did you see the job market react to this displacement? Can you tell if there is more open positions at the other 4 investment banks? Or the supply is the same and demand spiked?
 

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