Read between the lines of the Bear Stearns-JP Morgan story and it seems clear that the parties who insisted on the original $2 deal price were not JP Morgan (JPM) executives but Secretary of the Treasury Hank Paulson and Fed Chairman Ben Bernanke. Dimon is scurrying away from the $2 price as fast as he can. The Fed has denied that it insisted on the $2 price, but Treasury (and Hank Paulson) have not. Andrew Ross Sorkin reports:
There's been a lot of debate about the price that JPMorgan originally offered for Bear -- a price that even Jamie Dimon, JPMorgan's chief executive, suggested on Monday was unfairly low... So where did the guidance for that price come from? You guessed it. Ben S. Bernanke, the Fed chairman, and his teammate, Henry M. Paulson Jr., Treasury secretary, were calling the audibles in the boardroom. Timothy F. Geithner, the president of the Federal Reserve of New York, also was calling some last-minute plays.