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davepamn davepamn
 

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 M¢25  Funded By Mahalo ? |  July 17, 2009 01:51 PM

Why was Bears Stearns forced to merge with JP Morgan Chase?

Fast Facts:

1. JP Morgan was perceived as the lender of last resorts
2. The Fed desired to avert a financial meltdown and propped up the stock market by increasing liquidity and cut interest rates.
3. Bear Stearns had an investment bank to fund them, but a run on the bank caused a massive panic.
4. The Fed loaned Bear Stearns $30 billion, however, $13.4 trillion was being leveraged by $80 billion. The derivatives market was $43 trillion.
5. JP Morgan buys Bear Stearns for $2 a share and becomes a $90 trillion derivatives king.

Why do you think Bear Stearns was forced to merge?

What role did Bear Stearns play in the securities repurchase market?
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finfribble finfribble
 
 August 05, 2009 04:10 PM
because it would have otherwise filed for bankruptcy which forced it to merge because otherwise the firm would have ceased to operate...they were a top 10 player in the securities repurchase market but disproportionately high participant in the mortgage securities repurchase market


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