that’s a good question. One thing for certain, there’s no way for them to do all the due diligence that would ordinarily be part of a deal like this. Unless the government immunizes them somehow, I don’t see how this doesn’t end up in court as a shareholder lawsuit.
JPM almost bought Bear Stearns previously, has done alot of diligence. Bear Stearns building in mid-town is worth almost 1 billion, private brokerage is worth another billion, rest might be a wash. The Fed engineered the shut-down of LTCM in the ‘90’s as well.
Bear Stearns is the most exposed Wall Street firm in sub-prime/alt-A market. Very dependent on it. The reason they failed is an asset run by counter-parties last week. Nobody wants to leave assets in a bank that might go under, so there was a white-shoe run on the bank by it’s hedgie and PE customers. JPM is not in that position.