The sale of Bear Stearns at $2 per share to JPMorgan Chase has created headlines globally. The swift end of Bears Stearns is being used as a case example to highlight the laissez-faire philosophy that allowed financial services to spread almost unchecked. I am seeing a lot of debate online on how Fed bailed out the ailing and illiquid Bear Stearns. Separating fact from fiction, Jim Hamilton has done an excellent postmortem of the supposed “bail out” by Fed through JPMorgan Chase.
How the downturn in the US economy affects India is also being debated. Financial experts and economists believe that with liquidity drying up in troubled international Markets, Indian banks are turning to the domestic markets to raise funds for their corporate clients. International banks operating in India have also started to look at ramping up their domestic activities, rather than raise funds at cheaper interest rates from international markets. These are the best of times … These are the worst of times!
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