After months of rumors of financial troubles Bear Stearns is bought out in a last minute “bargain basement” buy by JPMorgan Chase. The Fed and the US government approved the purchase over the weekend with an eye towards preventing more market chaos as one of the largest investment banks collapses.
“This is going to go down in very historic terms,” said Peter Dunay, chief investment strategist for New York-based Meridian Equity Partners. “This is about credit being overextended, and how bad it is for major financial institutions and for individuals. This is why we’re probably heading into a recession.”
JPMorgan purchased Bear Stearns for $236.2 million dollars or approximately $2 per share. This discounted purchase was made possible by the Fed guaranteeing up to $30 billion of Bear Stearns more risky assets.
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