http://www.1115.org/2008/03/25/the-shotgun-wedding-arranged-by-the-fed/ west coast cap peelers Thu, 18 Mar 2010 01:48:15 -0600 http://wordpress.org/?v=2.9.1 hourly 1 http://www.1115.org/2008/03/25/the-shotgun-wedding-arranged-by-the-fed/comment-page-1/#comment-75554 sarabeth Tue, 25 Mar 2008 14:20:04 +0000 http://www.1115.org/2008/03/25/the-shotgun-wedding-arranged-by-the-fed/#comment-75554 In the last section of the post, I focused on the original terms of the transaction, for several reasons: -- That's what the Fed presided over and dictated, and what the boards of JPMorgan and Bear Stearns agreed to; the revised terms were in reaction to pressure from Bear Stearns stockholders. -- That gives us the value of the original Fed guarantee, and the size of the original boondoogle; with the revised terms, the value of the guarantee goes down slightly, and the ripoff of Bear Stearns stockholders goes down by that amount plus the $944 million extra that JPMorgan is paying them. Even under the revised terms, it's still a humongous handout, and it's still a massive rip-off. -- The $12 billion value increase on Monday the 17th can reasonably be attributed to news of the merger deal; the total increase between March 14 and March 24 would be attributable to too many different factors and much harder to disentangle. In the last section of the post, I focused on the original terms of the transaction, for several reasons:
– That’s what the Fed presided over and dictated, and what the boards of JPMorgan and Bear Stearns agreed to; the revised terms were in reaction to pressure from Bear Stearns stockholders.
– That gives us the value of the original Fed guarantee, and the size of the original boondoogle; with the revised terms, the value of the guarantee goes down slightly, and the ripoff of Bear Stearns stockholders goes down by that amount plus the $944 million extra that JPMorgan is paying them. Even under the revised terms, it’s still a humongous handout, and it’s still a massive rip-off.
– The $12 billion value increase on Monday the 17th can reasonably be attributed to news of the merger deal; the total increase between March 14 and March 24 would be attributable to too many different factors and much harder to disentangle.

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