Remember when it was an Open Market System?

March 18, 2008 |

I’m extremely curious; why was JP Morgan/Chase granted the sole privilege of purchasing Bear Stearns for $2 per share.  Seems like a lot of this went on behind closed doors and occurred in such a quick manner that other market participants didn’t have a chance in Hades to respond.  While I haven’t fully crunched the numbers, it appears that their prime brokerage business alone would be worth $236 million at a low multiple, let alone any of the other profitable divisions and residual assets.  I’m pretty sure there are a lot of pissed off hedge fund managers that would have liked to been in on the bidding here.  And let’s not overlook the shareholders that got royally screwed here. 

A tip for the Fed: let the chips fall where they may.  The only cure for the mess that we’re in is to teach all the players involved some fiscal responsibility.

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