What I said, only way better
Posted by BrianThe Wall Street Journal ran an op-ed today roundly condemning the Fed’s actions in the evolving JPMorgan purchase of Bear Stearns. It does a much better job of making the same points I fumbled about with yesterday.
J.P. Morgan CEO Jamie Dimon is a tough customer, but the way he’s rolling over the U.S. Treasury and Federal Reserve is getting to be embarrassing. Too bad our public officials aren’t as stalwart in standing up for taxpayers as Mr. Dimon is in defending his bank’s commercial interests.
Yesterday, Mr. Dimon called the Beltway’s bluff one more time as he renegotiated the terms of last week’s merger accord with Bear Stearns. J.P. Morgan agreed to quintuple his price, to $10 a share from the firesale value of $2, in return for enough shares to guarantee that the merger will now be approved by Bear shareholders. So Bear Stearns holders get more money, Mr. Dimon gets more certainty, but the Fed still gets left guaranteeing $29 billion worth of troubled Bear mortgage-related securities.
Read the rest for yourself.
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March 25th, 2008 at 7:39 am
Not to worry. It shouldn’t take the Fed long to print $29 billion more of money that’s hardly worth the paper it’s printed on.
March 25th, 2008 at 9:27 am
I believe we need to let the financial system crash and reboot. All the Fed has done is to reward bad behavior.
Reminds me need to find Opa’s 50M Mark bank note from the Weimar days. It might be useful.