Stories related to: Bear Stearns

The US is emerging from the credit woes triggered by the turmoil over subprime mortgages—despite the continuing wave of foreclosures across the nation, according to Treasury Secretary Henry Paulson. Paulson, in the most positive comments yet from the White House on the nation's economic troubles, in part credited the federal bailout of Bear Stearns, reports the Wall Street Journal. More »

A former top-ranking Fed official has called the central bank's decision to bail out Bear Stearns its "worst mistake in a generation," the Wall Street Journal reports. The official, former chief of monetary policy, compares the hasty move to errors that helped trigger the Great Depression. He accused officials of ignoring other options, such as demanding more from buyer JP Morgan, seeking other suitors or removing certain assets from Bear's portfolio. More »

Wary investors appear to be returning to Wall Street, the Journal reports, buying back into higher-risk debt issues from the likes of troubled Citigroup and Merrill Lynch. “Risk taking has come back in the market,” said one expert. More »

Economist, writer, actor, and lawyer Ben Stein follows up his December excoriation of Goldman Sachs' contribution to the subprime crisis with a look in today's New York Times into how Wall Street executives can get away with reckless behavior at the expense of the public. This time he targets the SEC, which has been so weakened in the Bush administration it quietly loosened the capital requirements for investment banks and "told Wall Street to police itself to save on regulatory costs."   More »

Hundreds of college grads who thought they had landed dream positions with Bear Stearns were canned before their first day on the job, the Wall Street Journal reports. As the giant bank began to implode, the students were at first assured their new jobs were safe—but then were sent packing to hunt for work along with 38,000 others recently let go by the financial industry. More »

Bear Stearns has been warned it could face civil charges stemming from an SEC probe into its anti-competitive bidding for municipal bonds, the Wall Street Journal reports. The firm is also being investigated by the FTC for alleged violations of consumer protection laws involving its mortgage-servicing unit. Bear Stearns officials said the company is co-operating with both agencies and the Department of Justice. More »

Thousands of Bear Stearns employees face uncertain futures after the investment bank's takeover by JPMorgan, and they’re entering a Wall Street beset with problems and bereft of jobs, reports Reuters. "They are coming into a market at a time when Wall Street doesn't offer much opportunity," one analyst said. Of 26 top executive positions at JPMorgan, only five went to Bear employees. More »

Bear Stearns was just hours from collapse, and letting it go down would have been disastrous, executives and regulators argued on Capital Hill today while defending the controversial bailout, the New York Times reports. Without the takeover, “we would all be facing a far more dire set of challenges,” said JPMorgan CEO James Dimon, citing the possibility of a mass run on other investment banks. More »

Federal Reserve Chairman Ben Bernanke steps onto a tightrope today for two days of Congressional testimony focusing on the central bank’s starring role in the Bear Stearns bailout. Bernanke likely will be taken to task for not stepping in earlier, and more forcefully, to avert economic chaos, reports the New York Times . More »

Although he doesn't foresee long-term catastrophe, Allan Sloan of Fortune sounds an alarm in today's Washington Post, saying he's "more nervous about the world financial system now than I've ever been in my 40 years of covering business and markets." He dissects "the collapse of a Tinker Bell financial market, one that depended heavily on borrowed money that has now vanished like pixie dust." More »

Lehman Brothers is selling $3 billion in new shares to allay fears after its stock dropped 42% this year, Bloomberg reports. "We still maintain that we don't need capital, but we've realized that perception is the dominant issue in today's markets,'' said CFO Erin Callan. Lehman fell up to 48% this month on rumors that it lacked cash and faced a Bear Stearns-style meltdown. More »

The Treasury plan unveiled today will never rein in free-wheeling markets because it isn't intended to, Paul Krugman writes in the New York Times . President Bush, who for 7 years has slashed at regulations, ignores how well they harness deposit-taking banks. And he denies that "non-depository" banks like Bear Stearns need them too. More »

Bear Stearns Chairman Jimmy Cayne yesterday became the poster boy for the company’s fall from grace, selling his one-time $1 billion stake in the investment bank for a mere $61.3 million, reports the Wall Street Journal. Cayne sold 5.7 million shares he’d acquired for $10.84 each, a far cry from the $159 they were worth last April. More »

The controversial acquisition of Bear Stearns by rival JP Morgan Chase, aided by billions of dollars of government credit, is about to become one of the most scrutinized deals in Wall Street history. Two separate Senate investigations will soon be under way, one by the Banking Committee and another by the Finance Committee, reports the New York Times . More »

Treasury Secretary Henry Paulson said today that investment banks owe the government more information about their financial condition if they are occasionally allowed to borrow money from the Federal Reserve, the New York Times reports. Paulson seemed to call for tighter regulations before calling the recent bailout of Bear Stearns "precedent only for unusual periods of turmoil." More »

The Icarus-like fall of Bear Stearns stock, trading as high as $170 a share a year ago before plummeting to $2 last week, has cost Bear employees—who once owned nearly a third of the company—more than $3 billion. That's even after JPMorgan raised its bid for the investment bank to close to $10 a share, reports Reuters. More »

The Bear Stearns crisis was bad news for many, but it was good news—or at least good business—for financial analysts at London-based Breaking Views. The credit crunch is increasing demand for the company’s financial insights, offered online and, through various partnerships, in print. Breaking Views is seizing the moment, courting more newspapers and offering free online columns, the Guardian reports. More »

Stocks ended up today, thanks to JPMorgan's increased bid for Bear Stearns and unexpectedly strong monthly home-sales data. Still, investors remained cautious, the Wall Street Journal reports. "Who knows if there's going to be another Bear Stearns out there?" an analyst asked. The Dow finished up 187.32 at 12,548.64, the Nasdaq 68.64 at 2,326.75, and the S&P 20.31 at 1,349.82. More »

JPMorgan will quintuple its takeover offer for Bear Stearns, setting a new $10-per-share price today after a weekend of tense renegotiations. Bear shareholders had objected to the proposed $2 deal, saying the bank-saving bid was a heist. JPMorgan is also buying 95 million more shares of the bank, which will give it 39.5% ownership and improved odds of getting the deal accepted, the Wall Street Journal reports. More »

JPMorgan Chase was in negotiations last night to quintuple its bid for Bear Stearns following a storm of angry protests by Bear shareholders over the initial bargain-basement deal for the investment banking giant, reports the New York Times . Under the new deal, JPMorgan Chase would pay $1 billion—$10 a share, up from the initial offer of $2 a share, which represented just one-fifteenth of Bear’s market price. More »