Having just spent 10 months selling a house in one of the hottest markets in Chicago for 15% less than an already discounted asking price while NOTHING was done to help homeowners, many of whom, like us, did NOT take out subprime mortgages, I have not one iota of sympathy for a bad actor like Bear Stearns or anyone who invested in them and lost money. They were among the most aggressive pushers of the worst subprime paper, and bad corporate citizens to boot, having pointedly refused to ante up to help in previous hedge fund rescues. As far as I'm concerned, the Fed's $30 billion should be withdrawn and applied to help homeowners....then we'll see what offer Bear Stearns shareholders are required to accept. For years, we've had to watch people like this collect obscene bonuses every year for adding no value that anyone could see on the grounds that it was what the market would bear. Then, when the market declares them bankrupt, they want to be paid off again? No way.

Lewis couldn't have become a billionaire by putting all of his eggs in one basket. That being said, however, someone somewhere sold him a bill of goods that convinced him to become Bear Stearns' largest single shareholder. That same bill of goods got sold to all the other shareholders as well. There were definitely people at BS that knew this whole thing was going to go down the tubes, just like at Enron. I wonder if we can actually prosecute them all and send them to jail, unlike we where able to do with Enron. Well, I don't think Lewis has a chance in hell of stopping this deal, but shareholders being able to sue BS to recover some of their losses? If US attorneys can flush out who knew what and when, possibly. It will be interesting to see, as sad as the whole thing is.

According to the NY Times on 9/11, 2007, Mr. Lewis was worth 2.5 billion and ranked number 369 on Forbes Ranking of World Billionares. He bought Bear Stearns at 107 to 109 a share, after it was down 35%, on sub prime mortgage concerns.

The other article on Huffpo reports he lost 1.16 billion on this acquisition, after it was reported that JP Morgan paid 2 dollars a share for Bear Sterns.

Eh... Did someone put all his eggs in one basket? - While trying to catch a falling knife?

Poor thing - now he's almost a millionare again - "out of the club" as they would say...

explain to me again why the rest of us can't kill the rich?

Seriously. How many idiots can long on to one blog at a time? This buyout from JP Morgan sucks and I think it shouldn't be allowed. However, these comments that "I hope all those that lose their jobs are Republicans" and that "he was a billionaire so he deserved it" are just insane. Are you people so blinded by your politics that such idiotic comments have to be made. The facts are that thousands of people are going to lose their jobs. Does it MATTER who they voted for? Thousands of people are going to lose their life investments. Does it MATTER if they were Republican or Democrat? This country will NEVER solve any of its problems when one side wishes pain and misfortune on the other. I hate this deal. I think it's fishy and shouldn't be allowed. And I'm a Republican. The amount of hate I read on this blog absolutely amazes me. I've never seen so many bitter and hateful people in all of my life. Regardless of what party you are affiliated with, you should be against this deal and against the government backing this buyout. If JP Morgan wants to buy them out fine. Let them pay for it. They will obviously make a great return on their investment so why they need government to help them out is beyond me. But then again what would I know? I'm just a know nothing, war mongering, racist, over privileged, out of touch, crooked Republican.

Peel back the layers. The families who started the Federal Reserve knew exactly what they were doing - enslaving the American people just as this same elite have enslaved the hoi poloi all around the globe. The goal is to make the US a third world country, filled with workers bees, so that the bloodlines can enjoy good health, good food, and lots of indulgences at our expense. Less population would be preferrable. They use us to generate more money for themselves through war (though they don't sacrifice themselves in battle) by funding both sides, monopoly of goods and services (they control trade, resources (think water), and infrastructure), and just about every other aspect of society. We've been anethtisized by television (including accepting violence as a norm and sexuality divorced from love), hampered by bad health through poisonous food and water, and the final nail in the coffin - a barrier built between us and our representatives that we cannot penetrate in order to voice our disdain for what they are doing to our country. The best thing we can do is educate ourselves by reading history, going way back to ancient Sumer, Babylon, and Egypt and realize the truth of our ancestry, and most important, don't let them divide us. Black vs whites, republicans vs democrats, muslims vs christians. It's an age old ploy to keep us occupied and unfocused on the real culprits. We should be standing up to them instead of dividing against one another. There are FAR more of us than them and it is our responsibility as humans to start doing something about it.

Evidently between the evisceration of Eliot Spitzer and socialism for Wall Street and Ben the Beard's 3/4 point cut, the gods of lower Manhattan have been given another lease on life. Gold and petrol are down today. Stocks are up a bit, so I guess we can all get back to our free market lives again and stop worrying. Well, that is until the next wave of mortgage rate adjustments cause more convulsions.

This is the year of the perfect storm - economic chaos and political realignment. When it clears who will be left standing?

Cheers,
Jack

I HOPE THE ONES GETTING THE PINK SLIPS ARE ONES WHO VOTED FOR BUSH IN 2000+2004

"Joseph C. Lewis, the reclusive billionaire investor who is Bear's second-largest shareholder," -- Or should that be "reclusive FORMER billionaire"? At $2 a share, his piece of Bear Sterns is worth about $24M. Last week it would have been about $360M and at its peak value of $170 a share, he would have been sitting on top of $2B. I know $24M is still a lot of money, but I sure as hell wouldn't want to lose $2 billion.

This is just a money laundering scheme that wold have put any drug kingpin away for life. And it's done by swindling shareholders of (what's left of) their stock value, and by taxpayers - even those driven to bankruptcy by these same mortgage sharks - stuck paying for it.

The reason for the JPM deal is hidden in the balance sheet. It's not the overwhelming liabilities, not the collapse of the mortgage resale market, not even the run on assets. It's what those assets are.

Bear holds a lot - ALOT - of Treasury Bonds. Were the company sold at auction, whether as a whole or piece by piece, you could pick up lots of T-bills for a fraqction of their par value. This means that instead of investors paying the Fed $10 billion for bonds that will be worth 15 billion in a few years, they can buy those same bonds from the carcass of Bear Stearns for $5 billion. and still get the $15 billion at maturity.

The taxpayer - uh, FED guarantee means JPM holds the bonds instead of selling them. Otherwise the Fed would have to jack up their interest to raise the same money, which means Bush would have to report a higher deficit, which means the Republicans have to take more blame for putting the economy in the toilet, which means a bigger Democratic majority next year. Either way it's done, we're still left footing the bill; only the blame gets shifted.

Now do we see why the money'ed interests hate the Dems and their quaint notion of REGULATION?

Or should I say - in this case; Hey Dems - Maybe regulation isn't such a bad idea after all.

Signed,

Shafted billionaires

guys and gals, Jim Morrison nailed it when he said "I don't know about you, but I'm gonna have my kicks before the whole shit-house goes up in flames." Little did he know that this sentiment has become the twisted, religion-cloaked philosophy of greed that has manifested itself in the Bush/Cheney administration.

Why is America in debt up to its eyeballs? Why have thousands of jobs get shipped overseas? Why is there no coherent energy policy? Why does Bear Stearns get bailed out when average people are left to scramble on their own?

Billionaire Lewis needs to know how it feels to eat fast food every day and take the bus to work.

let's see -- bears stearns gets $250 billion in taxpayer money. j. p. morgan buys bear stearns for $2 a share. who gets the $250 billion, j. p. morgan? bear stearns shareholders? when do the taxpayers get that money back? do we get interest compounded on that loan? that's a lot of money. can we split the interest on $250 billion 300 million ways and get refund checks from the government?

$250 billion was roughly bill clinton's surplus. it's good to see it going to the neediest americans.

Nomi Prins argues convincingly that the Fed action was not so much a bailout of Bear Stearns as it was a bailout of the Bush administration and their disastrous management of the economy.
www.commondreams.org/archive/2008/03/19/7759/