JPMorgan to Buy Bear for $2 a Share after Fed funding

The Fed also essentially made the takeover risk-free by saying it would guarantee up to $30 billion of the troubled mortgage and other assets that got the nation’s fifth-largest investment bank into trouble.

does anyone else think the government should not be bailing out financial institutions who through greed and over the top risk taking go bankrupt?

the only way people will learn thier lesson is to let them deal with the mistakes they made.

I do not agree with the government stepping in and doing as they have done here recently. If anything the government should step up to the plate and help Americans with gas prices.

the whole thing is sickening. the median cost of a home doesn’t match the median income, most families are two income, energy prices are through the roof, inflation is going to be rampant, manufacturing has been outsourced, the dollar will be dumped, the middle class will pay the biggest price yet bush and his cronies bail out the rich.

if the president says nothing is seriously wrong with the economy, then you know something is, otherwise they wouldn’t be talking about it. the guy who runs bear stearns said days earlier that everything was ok.

i predict a serious depression is on its way. this iraq war is bleeding us dry.

This was not a government buy-out. The government urged Morgan-Chase to buy Bears, and guaranteed the risk. No money from the gov. Any efforts to keep a major brokerage house from defauting must be taken, to prevent panic, which occured during the depression and made everything worse. The customers of Bears saw no loss-the stockholders did. Roanoker

Quite right, thank you for noting that no money came out of government coffers. There are two sets of people to blame for this mess…greedy lenders, and greedy home buyers.

Half of the 14,000 employees of Bear will lose their jobs and their 401K is just about worthless.

The buildings alone the JP got out of this deal are worth millions.

Will the Fed bail out every banking institution going down, because there will be more.

It will depend on the size of the bank and the impact of it’s collapse on the economy.

The stocks from the 401Ks can (and I predict will) recover much of their value. Don’t keep all your eggs in one basket,I thought we learned that with ENRON.

If the fed didn’t play financial nursemaid, none of this stuff would work anyway so I don’t think its bad at all what they did with Bear Stearns.

Capitalism is a joke, it’s supposed to be all about the “unseen hand” and things magically working out once people realize “greed is good” but it never works out that way, and the whole mess is highly regulated by the federal government and without that regulation the economy would grind to a halt.

I’m not sure where you get your ideas about Capitalism. At best that is a misquote of Adam Smith. The Free Market works…or do you prefer regulated economies such as in Cuba?

It does work, sort of (barring this kind of thing). It’s not free though, how can you call the modern economy ‘free’? It’s regulated up the wazoo!

Yes, its regulated too much, but its still essentially a free market. It works well, most of the time. The alternative is socialism, and I for one am not in favor of that. Although some of our presidential candidates seeminhgly are. It’ll all straighten out. I hope. ronaoker

I heard an economist explain yesterday that is was not a gov. bailout. JP Morgan is buying the company at a very cheap rate. The people who worked there, including the higher ups, have all lost a great deal of money. This is because their retirment and much of their wealth was in Bear stock and stock options. The stock lost 99% of its value overnight. So the folks who took the risks are indeed suffering. The company will simply change names - to JP Morgan. As for Bear actually going bankrupt, this fellow explained that it would tie up all investments managed by the firm (not necessarily in the firm) up for years until the final settlement. This would mean that Ma & Pa in Kansas who have their retirment portfolion managed by Bear would have those funds frozen for years, regardless of what stocks and funds they had invested in. IOW, it would hurt a lot of “little” investors. But rest assured, Bear is gone - the value was only on paper. The higher ups had the most stock and so lost the most. And they were the ones who decided to take the risk.

DISCLAIMER: The views and opinions expressed in these forums do not necessarily reflect those of Catholic Answers. For official apologetics resources please visit www.catholic.com.