The stunning collapse of Bear Stearns, one of the world’s largest investment banks, reinforces the serious financial meltdown occurring in the investment banking community. Sunday night Bear Stearns was purchased by JP Morgan for $236.2 million, or $2 a share.

(The $2/share represents roughly 1 percent of what Bear Stearns was worth just 16 days ago. Bear Stearns closed on Friday at $30 per share.)

Bear’s management said the company’s book value is still over $80 a share …or north of $9 billion. Ascertaining the value these days is next to impossible, obviously, given the potential (total) liabilities which are still unraveling.

One asset is known however, and that’s the Bear Stearns headquarters building in Manhattan which has a valuation of over $1 billion…

Fed Chairman Ben Bernake is pulling out all the stops to avoid a serious financial meltdown. On Sunday the Central Bank approved a cut in its emergency lending rate to 3.25% (from 3.50%) effective immediately and created a lending facility for big investments banks to secure short-term loans.

This new lending facility will be available to big Wall Street firms on Monday, March 17.


Want added insurance in this challenging times, then get educated about barter–a proven business tool that offers an alternative to the cash marketplace…
BARTER

This entry was posted on Monday, March 17th, 2008 at 12:43 am and is filed under From The Street. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.