Stock Market BSC (Bear Stearns)

[gizmo2431]

I know there's a lot of people on here that deal with stocks, and I would really appreciate their opinion at this point. I have a family member with significant shares in BSC and the stock fell drastically today. The only thing to do now is to deal with the matter at hand. Which is the best option?

A. Hold onto the stock now that it has already fell significantly and just see what happens?

B. Sell first thing Monday morning when the market reopens?

Thanks a lot guys...

[The HG]

Bear Stearns is getting bailed out by the Fed. They are getting bailed out because there are no free handouts in the US, which is the great thing about our country, right Capitalist Pig?

[capitalist pig]

A. then, hope for a takeover/merger before Monday morning.

The stock has traded down the last 12 trading days in a row, with way above normal volume the last 5. Someone knew this was coming and was bailing out all week.The same group was probably shorting it at the same time, so you have a chance of a pop with a short covering rally. Look for some rumors of takeovers/mergers to surface Monday morning, all JMO.

later

[capitalist pig]

Bear Stearns is getting bailed out by the Fed. They are getting bailed out because there are no free handouts in the US, which is the great thing about our country, right Capitalist Pig?

Ha Ha, personally id have let them fall flat on their a$$es, but the collateral damage would have been to much.

later

[Red_Sux]

hey capitalist pig, how do you compare 08 recession with the 1987 savings and loans debacle?

[gizmo2431]

thanks guys... anyone with other opinions? feel free to keep sharing...

[capitalist pig]

Im not smart enough to write a comparison as to what your asking. I will paste/copy a few paragraphs that seem to answer your question as far as the 80s go.It seems, that there is a definate relationship to the two, as long as we assume the lending markets are to blame for the 08 problems.

later

Explaining the S&L Crisis
One reason why so many thrifts failed in the 1980s was in the nature of how thrifts were deregulated. S&Ls historically were specialized financial institutions that used relatively long-term deposits to fund long-term mortgages. When thrifts began to lose funds to accounts that paid higher interest rates, initial deregulation focused on loosening deposit restrictions so thrifts could also offer higher rates. Unfortunately, because thrifts still lacked the authority to make variable rate mortgages many S&Ls were unable to generate higher income to offset expenses. While the Garn-St. Germain Act tried to correct this problem, the changes authorized were exceptionally broad and included virtually every type of lending power.

The S&L crisis was magnified by the fact that deregulation was accompanied by an overall reduction in regulatory oversight. As a result, unscrupulous thrift managers were able to dodge regulatory scrutiny, or use an S&L for their own personal gain. This, in turn, related to another reasons why S&Ls failed -- insider fraud and mismanagement. Because most thrifts were covered by federal deposit insurance, some lenders facing insolvency embarked on a "go for broke" lending strategy that involved making high risk loans as a way to recover from their problems. The rationale behind this was that if the risky loan worked the thrift would make money, and if the loan went bad insurance would cover the losses.

One of the most common causes of insolvency, however, was that many thrift managers lacked the experience or knowledge to evaluate properly the risks associated with lending in deregulated areas. This applied to any S&L that made secured or unsecured loans that were not traditional residential mortgages, since each type of financing entailed unique risks that required specific skills and expertise on how to identify and mitigate. Such factors meant that bad loans, and in turn thrift failures, could easily result from well-intentioned decisions based on incorrect information.

[Red_Sux]

yep, greedy bankers is the root of all evils.

[Cyclone]

That's a pretty good summary of the savings and loan mess. I had a front row seat to that in the 80s and 90s. This seems worse to me - the dollar amounts are even higher, and the problems are worldwide.

[RageWizard]

The chart for Bear Sterns tells us that getting out a year ago would have been the play. Those of you who say how would you know this then? Well you could see the foreclosures going up and the economy started last may to start going down hill. At this point I assume that you have endured a 100 point drop in the stock price. Ouch. Also everybody is negative on Bear Sterns at this time. Friday's news scared just about everybody out of the stock who where still holding shares. Oddly enough there will be an oppurtunity to buy Bear Sterns in the near future. I doubt they get bought out but then again Goldman Sachs has a shit load of money so you never know. I don't think it will happen but if it was going to this is a good time to do it. My advice is since you already endured the 100 point drop in price, you may as well hold onto it now. It will still probably drop some more but the bottom is closer at this point. This is also a good lesson for putting a stop loss on EVERY stock you own.

[capitalist pig]

Rage, Im thinking GS makes an offer under $40,or at least rumors surface of this, the price of BSC pops, then the deal stalls and things pretty much end up where they are now. There will be a window of chance to get out, but nowhere near the price of where it was, JMO.

later

[gizmo2431]

Thanks again, you guys have been great with the advice.

[Cash]

Buy options to short the stock. I believe JP Morgan will buy/takeover this company. I would also be selling my shares or buying options in Lehman Bros.

[Cyclone]

The Wall Street Journal is reporting that JPMorgan is buying Bear Stearns for $2 a share. And they're paying in stock, not cash. I guess if I owned Bear Stearns stock, it would make sense to hold on and see what happens. It can only go up from here, hopefully.

For what it's worth, the Australian stock market has been open about an hour and is down 1.5 percent.

[lifeisgood2008]

The Wall Street Journal is reporting that JPMorgan is buying Bear Stearns for $2 a share. And they're paying in stock, not cash. I guess if I owned Bear Stearns stock, it would make sense to hold on and see what happens. It can only go up from here, hopefully.

For what it's worth, the Australian stock market has been open about an hour and is down 1.5 percent.

so what happens if you own the BSC stock now? would it be sold at $2?

[mofome]

so what happens if you own the BSC stock now? would it be sold at $2?

welcome to the forum lifeisgood

[BrentCrude]

I invented the term,,Selective socialism!

We don't have a free market economy.From the time Woodward Wilson signed the Federal reserve act it's been down hill ever since as far as fiat currency,fractional banking,tax,spend,regulate,print money,go to war to boost economy and create makework Keynesian economics government jobs is concerned.Some presidents have accelerated this whole process like FDR,LBJ and Carter but even Nixon did a number on us when he took us off the gold standard and Reagan talked a good game but couldn't cut spending and was for illegal imigration.If a presidential candidate doesn't give you more socialism than the last president,they won't be voted into office.

Chrysler and Bear Stearns gets bailed out by the government and George Steinbrenner gets welfare to build a new stadium and destroy a landmark and the average person that doesn't belong to a special interest group is told to apply themselves more,pull themselves up by their bootstraps,save their pennies and work harder to get themselves out of a bind.We have selective socialism here.

[Cyclone]

The stock is worth $2, and JPMorgan will give you $2 worth of their stock for it.

The Fed made an emergency cut in the discount rate this afternoon. The Dow futures are down 117 right now, and the Asian markets aren't looking good. I know it's more fun to talk about the NCAA tournament today.

[lifeisgood2008]

thanks for replying. I am in bad shape huh?..

[Cyclone]

It could be worse. British billionaire Joseph Lewis bought a 9.6 percent stake in Bear Stearns a few months ago, and has now lost $800 million.

The Dow futures are now down 191, and Asian markets are very weak. Hong Kong, Shanghai, and Taiwan are just opening.

[BigBollocks]

Lifeisgood, I hope you're not the person in question. Gizmo I hope your family member's portfolio is diversified. To say anyone with Bear Stearns took it on the chin would be an extreme understatement.

And the sad thing of it all is that most (myself included) feel that JPMorgan did Bear Stearns and the entire market a tremendous favor by buying for $2 a share what was worth $0.

[Red_Sux]

sold for $2...wow. jp morgan made a killing on this deal

[The HG]

And the sad thing of it all is that most (myself included) feel that JPMorgan did Bear Stearns and the entire market a tremendous favor by buying for $2 a share what was worth $0.

JPMorgan didn't do anyone a favor. Any time you look at a situation on Wall Street and conclude that someone did someone a favor, you aren't getting what happened.

JPMorgan is free rolling with taxpayer money. They are taking zero risk, they can only make money on the deal. If they make money, they keep it, if they lose money, the Fed (ie taxpayers) pays for it.

[BigBollocks]

JPMorgan didn't do anyone a favor. Any time you look at a situation on Wall Street and conclude that someone did someone a favor, you aren't getting what happened.

JPMorgan is free rolling with taxpayer money. They are taking zero risk, they can only make money on the deal. If they make money, they keep it, if they lose money, the Fed (ie taxpayers) pays for it.

Point well taken sir. You always see all the angles HG

[gizmo2431]

Lifeisgood, I hope you're not the person in question. Gizmo I hope your family member's portfolio is diversified. To say anyone with Bear Stearns took it on the chin would be an extreme understatement.

And the sad thing of it all is that most (myself included) feel that JPMorgan did Bear Stearns and the entire market a tremendous favor by buying for $2 a share what was worth $0.

Yes, it is diversified, and the only reason they held so much stock in Bear Stearns is because they were a retired employee from the company. All of their shares were stock options received from working at the company. Hoping for the best in the future for them.

[durito]

The Bear Stearns building alone is worth $1.2 billion. $2 a share about $230 million. They got $30 billion from the fed to cover obligations.

JP Morgan is basically taking on no risk, and getting to pick and choose what parts of Bear Stearns to incorporate into their company (and make no mistake there are still some quite valuable assets there). I think when this all gets sorted out, they will have gotten a steal (and helped to stave off a major financial crisis).

[Red_Sux]

The Bear Stearns building alone is worth $1.2 billion. $2 a share about $230 million. They got $30 billion from the fed to cover obligations.

JP Morgan is basically taking on no risk, and getting to pick and choose what parts of Bear Stearns to incorporate into their company (and make no mistake there are still some quite valuable assets there). I think when this all gets sorted out, they will have gotten a steal (and helped to stave off a major financial crisis).

yep, and jp morgan will act like a hero. too bad other banks are barrelled in, otherwise, they would propose a bid also.

[wild willy]

Aoag just changed trading names to pgcr do your reasearch and you will see why.
STRONG BUY

[pjakesmith]

Thanks a lot for the post!

[tltaylor89]

Buy Goog and be happy