TheStreet.com's Jim Cramer says there's some reason for caution, but no reason to get out of the market here.
There all right there. Don't you feel it? Hundreds of stocks at resistance. Hundreds have formed a nice base. The Transports and the Dow are moving in synch. The earnings period surprisingly great, with so many compani...
TheStreet.com's Jim Cramer says that by offering a good yield, Lehman helped transform the case on a number of financials.
In a world of virtually no fixed-income return, when you offer a 7% piece of paper with terrific upside, as Lehman (NYSE: LEH) (Cramer's Take) did, you can bet you will get takers.
It's been a vicious down market in financials. Hey, I know of what I speak -- I own CapitalSource (NYSE: CSE), Newcastle Investment (NYSE: NCT) and MFA Mortgage (NYSE: MFA) in my portfolio. I've previously discussed how my investments have been left wounded and bloody at the claws of the angry bears that have been running rabid-crazy on Wall Street as of late.
But -- is it me, or do things feel a little better? Has the price action on the major market indexes put you in a better mood? Of course, I'm w
If you want to buy Bear Sterns look at the bonds. The bail out deal is about preserving the bonds and other debts - NOT the equity. Bear Stearns bonds are now trading at about 6% with a 2 percent discount. That leaves a potential profit of 8%. bonds can be leverage to the hill. If you take $10,000 and borrow $90,000 from your broker at 5% that will leave a nice profit on your $10,000 equity - NOW KEEP IN MIND THE BEAR STEARN PROS APPLIED THIS PRINCIPLE IN BUYING DEBT FROM COUNTRY WIDE AND NOW THEY ARE BROKE!!!!
Of course it is hardto recomend the bonds the day after all the bond t
JP Morgan did not offer to buyot BSC for $2.00 a share. What is happening is JP Morgan presented a plan to bring the liquidity ratio high enugh to insure there would be no default!!!!
$30 BILLION is the true price tag.
If Bear Stearns can raise $30 BILLION they will then tell JPM to fuck off. If someone out there wants to deposit $30 billion with BSC with a interest free loan they can buyout BSC for 4,5,6,7,8,9,10,15, or 20 dollars a share. But before the bidding on BSC starts the debt to liquidity ratio has to be fixed.
The $2 per share is the scheme based on JPM and the feds bring the liquidity of Bear Stearns up to a safe and reasonable level.
If Bear Sterns can get the job done with a buyout higher than $2.00 they can tell JPM and the Federal Government to F off.
Maybe they will, maybe they won't....
I wouldn't short on the theory they won't and I wouldn't buy on tthe theory that they will tell JPM to F off. If you don't hold a position in this stock now. You are insane to be guessing which side the coin will fall on.
3/14 - "In response to this announcement, S&P cut its credit rating of Bear Stearns to BBB from A. The events of this week have severely constrained Bear Stearns’ ability to do business...Risk and relative return prospects dictate that we step aside; we are reducing our rating to Neutral from Outperform."
"...factoring in higher funding costs and significantly lower go forward revenue prospects—a byproduct of the ratings agency downgrades etc, we’re lowering our 2008 and 2009 estimates to $2.25 and $4.10 per share respectively (old: $7.50 and $9.00)...Factoring our estimate changes into ou...
3/14 - "Today, Bear Stearns announced that it had agreed to receive financing from JPMorgan via a secured loan facility for an initial period of up to 28 days as needed. In addition, BSC announced it is in talks with JPM to establish permanent financing or other alternatives from JPM. BSC is facing a crisis of liquidity and concerns of creditworthiness."
"The problem that Bear Stearns and other financials face is a great unwind of leverage. A company is only as solvent as the perception of its solvency. When a company that is leveraged over 30-to-1 faces a crisis of liquidity and confidenc...
3/13 - "Despite its billions of dollars, the firm has had a tremendous break-down with its clients and counterparties. According to Bear's CEO, Alan Schwartz, the liquidity position "deteriorated" in a matter of about 24 hours (yes, it's something you never want someone like him to say). As a result, the firm has received secured loan facilities from JPMorgan Chase & Co. (NYSE: JPM) and even the Federal Reserve Bank of New York.
This action is vital. After all, a collapse of a massive financial institution is poison for all the other players (if history is any indication). What's more, fir...
"What happened to Bear Stearns?
It ran out of money."
"So Bear is too big to fail?
Well, the bank itself can fail. But the Fed is going to do whatever it can to ensure that the transactions that it started will end up being finished. Right now the Fed's biggest hope is probably that Bear manages to find itself a buyer. The name on everybody's lips is J.P. Morgan—a bank big enough to be able to absorb any of Bear's losses without going bust itself."
"And what are the chances of Bear getting out of it in one piece?
Slim, at this point: the amount of capital needed to reassure the markets...
There was wild action in Bear Stearns options today as share prices hit a 5 year low following Moody's downgrades of Alt-A deals.
Shares of Bear Stearns (BSC) Cos. tumbled to a 5-year low Monday, weighed by downgrades of Alt-A deals by Moody's Investors Service, as well as a negative comment on brokers in general from Bernstein Research.
Bear Stearns (BSC) missed the early part of Tuesday’s Fed-fueled financial sector rally after an analyst warned that the struggling brokerage firm might be forced into a merger. Analyst Richard Bove cut his price target to $45 a share from $67 and reduced his 2008 earnings estimate by more than half. “The problem is Bear’s business model is broken,” Bove said, according to Bloomberg.
Bear Stearns is the smallest among the top investment banks, it is easily a take over target. The first to be exposed to the subprime losses, although the loss is very small compared to other banks. I suspect the Chinese will be the one to buy this bank, of course Citic bank of China has already taken some share swap in Bear Stearns. The stock is a strong buy.
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It's been a vicious down market in financials. Hey, I know of what I speak -- I own 
