On Mar 19, 2008, at 12:46 PM, Jordan Hayes wrote:
> Shane writes:
>
>> The supposed "bailout" of Bear looks more like daylight
>> robbery by Morgan and the Fed--their Manhattan headquarters alone is
>> worth *4 times* the "offer they can't refuse" ...
>
> Don't forget that the probable value of Bear's other holdings is
> negative.
>
> If I have $10M of debt and a $4M asset, selling the combined -$6M
> value
> for $500k doesn't make it a steal.
Bear faced collapse not because it was insolvent by any reasonable (long-term) standard but because it was threatened by margin calls. So it took the offer it couldn't refuse. Citic has much more than enough resources to cope with a short-term panic and operate Bear as a Chinese state-owned investment bank inside the US. That is what the US "authorities" will absolutely not tolerate.
Shane Mage
"Thunderbolt steers all things...it consents and does not consent to be called Zeus."
Herakleitos of Ephesos