Posted on 03/17/2008 6:41:36 AM PDT by Lazamataz
To everyone who called me or emailed me over the weekend saying, "How could this happen? How could Bear Stearns go from $57 to $2 in two days?" I would offer the comment of one astute trader, who said, "When you are levered 30 times and have no access to finance it doesn't take a huge move on $400 billion in assets and $260 billion of debt to wipe out the equity."
Two questions dominate the Street this morning:
1) What will Bear Stearns' shareholders--specifically Bear employees--do? The $2 per share deal is subject to shareholder approval, and Bear employees--many of whom have significant parts of their life savings in Bear stock--are certainly stunned enough to create at least a minor protest over the price. Sandler O'Neill noted that "we do not believe it is incomprehensible that this deal may have bought Bear Stearns additional time to assess its situation which may lead shareholders to reject the offer."
2) What will happen to the other major brokers and banks, and what will the reaction of the credit markets be? With a book value at nearly $80 per share for Bear, the $2 price makes it tough on other brokers. A flight to firms with the strongest balance sheets seems obvious. Analysts were out this morning with various comments on who does have the strongest balance Goldman Sachs , for example, opined that Morgan Stanley and JP Morgan had the strongest balance sheet. Street seems to be treating it that way: Lehman down 28 percent pre-open, Merrill down 16 percent, Goldman and Morgan Stanley down down 8 percent, JP Morgan up.
Meredith Whitney, who has become an ax in this space through her coverage at Oppenheimer, put out a note this morning titled, "BSC Fire Sale to Cause Valuation Adjustment for All Financials: Banks at Risk," in which she argues that financial stocks have further downside of as much as 50% based upon 1990/1991 multiples of tangible book values. She says most banks are trading well above their price to book lows of the 1990-1991 cycle.
So, what will finally end all this turmoil? The Street is screaming that the government should directly or indirectly begin buying mortgage backed securities, and, to a lesser extent that a wider bailout program needs to be devised to stem home price depreciation.
I’m not “lying” about the economy, no matter how much you desperately wish I am, for fear that you’d actually have to get off your ass and prove it.
If I can educate you on this thread, I won’t have to.
You’re the one who props up government management....like in “free” “a/k/a governmental managed” trade.
NYMEX crude oil down $6 (six)
This thread is about Bear Stearns, and the government bail out.
When are you going to make a thread about derivatives, which is NOT what this thread is about?
Want a laugh? Watch Cramer last week screaming “Don’t Sell Bear Stearns! Bear Stearns is a great stock!”
Michelle Malkin has the utube link on the left side, scroll down a little until you see Cramer.
The market is disproving your claims.
That is so true. I want less government management and lower taxes, and you run crying to it because someone might be making more money than you (thus the 30 pieces BS). Tell me, how much should taxes be raised on the bourgeoise?
“Don’t move your money from Bear......that’s just being silly.”
OMG! What an IDYOT!
What claims would that be? Oh, that’s right, you’re just full of crap.
Cite the post where you claim you can infer, much less outright, make that claim? You cannot. Yet another lie from you....not surprised.
When you have nothing but propaganda to sell....it makes it difficult for you to post the truth.
BREAKDOWN
% of Shares Held by All Insider and 5% Owners:
39%
% of Shares Held by Institutional & Mutual Fund Owners:
77%
% of Float Held by Institutional & Mutual Fund Owners:
125%
Number of Institutions Holding Shares:
420
MAJOR DIRECT HOLDERS (FORMS 3 & 4)
Holder
Shares
Reported
BEAR STEARNS COMPANIES INC. 2008 TRUST
27,316,339
14-Feb-08
CAYNE JAMES E
5,612,922
21-Dec-07
SCHWARTZ ALAN D
1,026,680
21-Dec-07
GLICKMAN CARL D
291,542
31-Jan-08
MINIKES MICHAEL
250,000
21-Dec-07
ADVERTISEMENT
TOP INSTITUTIONAL HOLDERS
Holder
Shares
% Out
Value*
Reported
BARROW, HANLEY MEWHINNEY & STRAUSS, INC.
11,485,058
9.73
$1,013,556,368
31-Dec-07
MORGAN STANLEY
6,335,729
5.37
$559,128,084
31-Dec-07
Legg Mason Capital Management, Inc.
5,721,010
4.84
$504,879,132
31-Dec-07
PRIVATE CAPITAL MANAGEMENT, INC.
5,541,259
4.69
$489,016,106
31-Dec-07
Barclays Global Investors UK Holdings Ltd
4,245,451
3.60
$374,661,050
31-Dec-07
STATE STREET CORPORATION
3,550,715
3.01
$313,350,598
31-Dec-07
VANGUARD GROUP, INC. (THE)
3,149,691
2.67
$277,960,230
31-Dec-07
JANUS CAPITAL MANAGEMENT, LLC
2,765,699
2.34
$244,072,936
31-Dec-07
FMR LLC
2,359,011
2.00
$208,182,720
31-Dec-07
PUTNAM INVESTMENT MANAGEMENT, LLC
2,242,980
1.90
$197,942,985
31-Dec-07
TOP MUTUAL FUND HOLDERS
Holder
Shares
% Out
Value*
Reported
VANGUARD/WINDSOR II
8,358,352
7.08
$949,508,787
31-Oct-07
PUTNAM FUND FOR GROWTH AND INCOME
2,350,605
1.99
$267,028,728
31-Oct-07
LEGG MASON VALUE TRUST
1,600,000
1.35
$196,496,000
30-Sep-07
JANUS TWENTY FUND
1,496,429
1.27
$132,059,859
31-Dec-07
VANGUARD 500 INDEX FUND
1,100,046
.93
$135,096,649
30-Sep-07
PUTNAM VOYAGER FUND
965,300
.82
$109,658,080
31-Oct-07
American Beacon Large Cap Value Fd
862,450
.73
$97,974,320
31-Oct-07
PUTNAM INVESTORS FUND
742,700
.63
$84,370,720
31-Oct-07
VANGUARD TOTAL STOCK MARKET INDEX FUND
702,594
.59
$86,285,569
30-Sep-07
COLLEGE RETIREMENT EQUITIES FUND-STOCK ACCOUNT
696,560
.59
$85,544,533
30-Sep-07
View Transactions for Insiders & Institutional Holders
*
Value shown is computed using the security's price on the report date given.
"But you already have your 30 pieces of silver."What are you trying to imply, if not someone is making more money than you? That Toddsterpatriot is not becoming wealthy, and that you have a better idea how he should become wealthy. Like a reverse "class warfare" thing?
LOL! Over the last TWO YEARS! What maroons.
I'm trying to help Positive and his sour stomach.
When are you going to make a thread about derivatives
Not now.....not ever.....never!
which is NOT what this thread is about?
Complain to the guy who brought up derivatives first.
Judas comes to mind, which has nothing to do with anything "making more money" than ANYBODY. But, you already knew that. Paid shills are familiar with Judas, I think.
Toad, you make it your uttermost attempt to siderail discussions onto derivatives if the word is ever on any post.
Please make a thread devoted to derivatives so that you stop making entire threads about it. Thanks.
I'm in favor of smaller government, so maybe I'm selling out the big government guys like Nic and his union buddies.
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