Buy this domain.

free-best-hosting.com

Bear Stearns Stockholders, Employees Face Uncertainty in Wake of Collpase | 24-7-news.com cialis online

Bear Stearns Stockholders, Employees Face Uncertainty in Wake of Collpase

AddThis Social Bookmark Button

The stunning collapse of Bear Stearns, one of the world’s largest investment banks, has left many victims in its wake. Among them, hundreds of Bear Stearns employees who face massive layoff and Bear Stearns shareholders who now find that their stock in the company is worth just a fraction of what it was a week ago.

Bear Stearns was acquired by JP Morgan Chase over the weekend in an effort to salvage the failing institution. The buyout of Bear Stearns by JP Morgan Chase – termed a “shotgun marriage” by some – was consummated after the Federal Reserve agreed to provide up to $30 billion in non-recourse financing to JP Morgan, with Bear Stearns’ illiquid mortgage and other securities as collateral. When the dust settled, JP Morgan ended up buying Bear Stearns for a paltry $2.00 a share, a fraction of what it was once worth.

The collapse of Bear Stearns began last Tuesday, when financial markets began turning against the investment bank. But the genesis of the crisis occurred when the housing bubble burst. As home prices soared to economically unsustainable levels, fewer people could afford to buy. In response, banks and other lenders created new types of mortgages, which made loans affordable to people who normally wouldn’t qualify for a conventional 30-year mortgage. Banks and brokers collected fees for closing the deals but faced no risk once they sold the loans to Wall Street. Investment banks like Bear Stearns were enthusiastic buyers of subprime loans, which they packaged with other types of debt into complex securities and sold to other investors.

Bear Stearns was one of the biggest underwriters of complex investments linked to mortgages. Two of its hedge funds, heavily invested in subprime mortgages, folded in July. Bear’s investors became increasingly reluctant to do business with the company. Despite the company’s assurances that it had plenty of cash on hand to continue operations, it collapsed Friday.

Because it was linked to so many other financial institution, the collapse of Bear Stearns threatened the already precarious financial markets. The Federal Reserve was desperate to prevent a “fire sale” of Bear Stearns’ assets, which could have further depressed markets. For that reason, the Federal Reserve stepped in to mitigate the damage. The Fed bailout included the $30 billion in non-recourse funding to JP Morgan. Non-recourse funding means that if the collateral goes bad, the Fed can’t come after JP Morgan for other assets. In the end, taxpayers could be on the hook for the Bear Stearns debacle.

Left holding the bag are Bear Stearns stockholders. Bear Stearns is being sold for just $236 million. The deal’s value is more than 90 percent below the company’s Friday closing share price of $30.85. Earlier in the week, the stock had been selling for as much as $60 per share. But even as the investment bank was crumbling around them, Bear Stearns executives maintained that the bank was solvent.

Already, Bear Stearns shareholders are exploring their legal options. Shareholders might sue Bear and its executives and officers for securities fraud, contending they failed to disclose the company’s true financial health, lawyers say. Separate suits may be brought by Bear Stearns employees – already facing the threat of layoffs -who hold company shares that are now virtually worthless

« »

Leave a Reply

You must be logged in to post a comment.

NEWS CATEGORIES

GOVERNMENT NOTICES

ARCHIVES


Defective Johnson & Johnson Depuy ASR Hip Implants

The Johnson & Johnson Depuy ASR Hip Implant is suppose to last 15 years, but can fail in only a few years after surgery. Victims with faulty hip implants endure excruciating pain, pain in the groin, death of tissue in the hip joint and loss of surrounding bone. GET ALL THE FACTS NOW! CLICK HERE!
defective-hip-replacement.com

CAT Scans Radiation Exposure

If you had a CT or CAT scan and now have a band of missing hair, skin reddening or any other problems possibly related to a radiation overdose, you may have been exposed to much radiation due to incorrect settings on these machines. CONTACT US TODAY!
CAT-Scans-Radiation-Exposure.com

Water Contamination From Fracking

Hydraulic Fracturing of Fracking a way to extract natural gas from shale is contaminating water supplies across the country. Get the facts to keep your drinking water safe for your family.
WaterContaminationFrom Fracking.com

Overexposure to PCBs

Many people unknowingly have been exposed to high levels of PCBs. Recently 3 schools in NY City were found to have dangerous levels of PCBs throughout. Many workers for Monsanto, General Electric, and Westinghouse were exposed to high levels of PCBs. PCBs are a dangerous toxic substance that doesn't break down easily and can cause chloracne, bleeding and neurological disorders, liver damage, spontaneous abortions, malformed babies, cancer, and death. GET THE FACTS!
Overexposure to PCBs.com

Great Photography

Tallis Photo, the number one photographer for great corporate, wedding, and special occasion photos. CONTACT US TODAY!
TallisPhoto.com

Poligrip Lawsuit

Super Poligrip or Fixodent May Cause Nerve Damage. 800-LAW-INFO
Poligrip-Lawsuit.com

Personal Injury Lawyer Nassau County

If you or someone you love was injured CONTACT US TODAY!
Nassau-Personal-Injury-Lawyer-Online.com

Nursing Home Blog

When a loved one is abused at a nursing home, it is time to take action. STOP nursing home abuse!
nursing-home-blog.com

Car Accident Lawyer Nassau County

If you or someone you love was injured in an auto accident CONTACT US TODAY!
www.nassau-car-accident-lawyer-online.com

Suffolk County Auto Accident Lawyer

If you or someone you love was injured in an auto accident in Suffolk County, NY CONTACT US TODAY!
www.suffolk-car-accident-lawyer-online.com

Don't Be Denied Veterans Benefits

If you or someone you love was denied veterans benefits CONTACT US TODAY!
www.veterans-benefits-denial.com

Oil Rig Spills Lawyer

Oil Rig Spills harm the environment and cause heavy losses to coastal game and fishing industries, as well as a loss of waterway usage, resulting in a loss of income to individuals and businesses, and a loss of beach front usage. Don't let a spill cause you harm, CONTACT US TODAY!
www.oil-rig-spills.com

Whistle Blower

Stand up and say what you think is right. See something, say something.
whistlebloweradvisor.com