Archive for the ‘JPMorgan Chase’ Category

U.S. Investing $250 Billion in Banks: Financial ‘Bailout’ Continues to Intill Hope

October 14, 2008

By Mark Landler
The New York Times

WASHINGTON — The Treasury Department, in its boldest move yet, is expected to announce a plan on Tuesday to invest up to $250 billion in banks, according to officials. The United States is also expected to guarantee new debt issued by banks for three years — a measure meant to encourage the banks to resume lending to one another and to customers, officials said.

A euro coin and one US dollar bill. The dollar has dipped against ... 

And the Federal Deposit Insurance Corporation will offer an unlimited guarantee on bank deposits in accounts that do not bear interest — typically those of businesses — bringing the United States in line with several European countries, which have adopted such blanket guarantees.

The Dow Jones industrial average gained 936 points, or 11 percent, the largest single-day gain in the American stock market since the 1930s. The surge stretched around the globe: in Paris and Frankfurt, stocks had their biggest one-day gains ever, responding to news of similar multibillion-dollar rescue packages by the French and German governments.

Treasury Secretary Henry M. Paulson Jr. outlined the plan to nine of the nation’s leading bankers at an afternoon meeting, officials said. He essentially told the participants that they would have to accept government investment for the good of the American financial system.

Of the $250 billion, which will come from the $700 billion bailout approved by Congress, half is to be injected into nine big banks, including Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase, officials said. The other half is to go to smaller banks and thrifts. The investments will be structured so that the government can benefit from a rebound in the banks’ fortunes.

President Bush plans to announce….

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http://www.nytimes.com/2008/10/14/business
/economy/14treasury.html?_r=1&hp&oref=slogin

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Asian Markets Soar On Signs of Renewed Hope

By JEREMIAH MARQUEZ, AP Business Writer 18 minutes ago

HONG KONG – Asian markets soared for a second day Tuesday, led by a record 14 percent jump in Tokyo, after Wall Street rallied from its worst week ever on optimism that government rescue efforts will heal the crippled global financial system.

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http://news.yahoo.com/s/ap/20081014/ap_on_bi_ge/world_
markets;_ylt=AhU9ssfZ2fvgiOjAnyoc0oSs0NUE

A businessman walks past an electonic board showing the Hang ...
A businessman walks past an electonic board showing the Hang Seng Index. Global stock markets staged spectacular gains Monday as governments pumped hundreds of billions of dollars into banks crippled by the credit crunch, coaxing newly confident investors to buy shares.(AFP/Mike Clarke)

A South Korean woman passes a foreign exchange facility in Seoul. ... 
A South Korean woman passes a foreign exchange facility in Seoul.(AFP/File/Jung Yeon-Je)

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Fire Sale of Bear Stearns Bear Sparks Rout, Bush Tries to Calm

March 17, 2008
By Jack Reerink 

NEW YORK (Reuters) – A fire sale of Bear Stearns Cos Inc (BSC.N) stunned Wall Street and pummeled global financial stocks on Monday on fears that few banks are safe from deepening market turmoil.

A U.S. two dollar bill is taped to the revolving door leading ...
A U.S. two dollar bill is taped to the revolving door leading to the Bear Stearns global headquarters in New York March 17, 2008.(Kristina Cooke/Reuters)

Trying to assuage worries that the credit crisis is spinning out of control, President George W. Bush said the United States was “on top of the situation,” but the sell-off intensified in the early afternoon.

The U.S. Federal Reserve geared up for a deep cut in interest rates on Tuesday to blow money into the fragile financial system — the latest in a series of rate cuts that has brought down borrowing costs by 2-1/4 percentage points and hammered the U.S. dollar to record lows.

Staff at Bear Stearns‘ Manhattan headquarters were welcomed to work on Monday by a two-dollar bill stuck to the revolving doors — a spoof on the bargain-basement price of $2 per share that JPMorgan Chase (JPM.N) is paying for the firm. A hopeful Coldwell Banker real estate agent was hawking cheap apartments to employees who saw the value of their stock options go up in smoke.

The combination of Bear Stearns’ bailout and the Fed’s offer on Sunday to extend direct lending to securities firms for the first time since the Great Depression highlighted just how hard the credit crisis has hit Wall Street.

And it scared market players worldwide….

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http://news.yahoo.com/s/nm/20080317/bs_nm/bearstearns_fed_dc;_ylt=
Agm1uUl9fJe7eEc0zjCowb.s0NUE

Asian stocks tumble on Bear Stearns news

March 17, 2008

NOTE:   Just four days after Bear Stearns Chief Executive Alan Schwartz assured Wall Street that his company was not in trouble, he was forced on Sunday to sell the investment bank to competitor JPMorgan Chase for a bargain-basement price of $2 a share, or $236.2 million. Just a few days ago Bear Stearns was valued at $30.00 a share.

Just one year ago, Bear Stearns was valued at $172.00 per share.

A man leaves a Bear Stearns' office in Hong Kong's Central ...
A man leaves a Bear Stearns’ office in Hong Kong’s Central district March 17, 2008. JPMorgan Chase & Co said on Sunday it would buy stricken rival Bear Stearns for just $2 a share in an all-stock deal that values the U.S. investment bank at the centre of the credit crisis at about $236 million.REUTERS/Victor Fraile (CHINA) 
 
A Financial analyst told Peace and Freedom on Monday that the Bear Stearns building in New York City is worth more than $240 million.

The sale on a Sunday was almost unprecedented.

A few hours later the Federal reserve approved a cut in its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans. In an example of the urgency of the situation, the Fed said the new lending facility will be available to big Wall Street firms on Monday.
Federal Reserve Chairman Ben Bernanke testifies before the House ... 
Federal Reserve Chairman Ben Bernanke testifies before the House Financial Services Committee about the latest measures to heal the U.S. economy, on Capitol Hill in Washington in this file photo from Wednesday, Feb. 27, 2008.
(AP Photo/J. Scott Applewhite)

This bold action Sunday evening is meant to provide cash to financially squeezed Wall Street investment houses, a fresh effort to prevent a spreading credit crisis from sinking the U.S. economy.
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By KELLY OLSEN, AP Business Writer

SEOUL, South Korea – Asian stocks plunged and the dollar sank Monday after JPMorgan Chase said it would buy troubled U.S. investment bank Bear Stearns, signaling to investors the depths of the credit crisis.
Bear Stearns headquarters

Bear Stearns headquarters

Oil prices hit a record in Asian trading and U.S. stock index futures were down sharply, suggesting Wall Street would open lower Monday after sinking Friday.

JPMorgan said Sunday it would acquire Bear Stearns for $236.2 million — or $2 a share — in a deal that represents a stunning collapse for one of the world’s largest and most venerable investment banks.

The buyout was aimed at averting a bankruptcy and a spreading crisis of confidence in the global financial system sparked by defaults in the U.S. subprime mortgage market.

But to Asian investors the move suggested that the credit woes are far from over and fanned worries that other big American banks are facing serious troubles.

“There is persistent credit uncertainty. Market players have been repeatedly let down which shows the subprime mortgage problems are so deep-rooted,” said Atsuji Ohara, global strategist of Shinko Securities in Tokyo.

“Just buying an investment bank does not solve the problem,” he said. “Markets are prodding (the U.S. government) to inject public funds.”

News of the acquisition of Bear Stearns stunned investors just before markets opened in Tokyo and Seoul. Both fell sharply before paring some losses in afternoon trading.

Japan‘s benchmark 225 index sank 3.7 percent to close at 11,787.51 points, its lowest in more than 2 1/2 years. In Seoul, the Korea Stock Price Index fell 1.6 percent to 1,574.44 after sagging as much as 3.9 percent.

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http://news.yahoo.com/s/ap/20080317/ap_on_bi_ge/
world_markets;_ylt=AuhKf.RjS0u30g
ZbUPzJYBOs0NUE

By John E. Carey
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This bold action Sunday evening is meant to provide cash to financially squeezed Wall Street investment houses, a fresh effort to prevent a spreading credit crisis from sinking the U.S. economy.

But the news sent the dollar tumbling to a record low against the euro as investors worried that there would be more casualties in the widening U.S. financial crisis.

And Asian stock markets reacted with concern and dismay.

A trader stands on the floor of the Philippine Stock Exchange which closed down 3.88 percent on Monday.
Photo by Darren Whiteside (Reuters).

Asian stocks plunged and the dollar sank Monday in early trading.
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Japan’s benchmark 225 index sank 3.7 percent to close at 11,787.51 points, its lowest in more than 2 1/2 years. In Seoul, the Korea Stock Price Index fell 1.6 percent to 1,574.44 after sagging as much as 3.9 percent.
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And there is a ripple effect across Asia.
US dollar and pound sterling banknotes. The pound has posted ... 

Take Vietnam for example.  The communist state has had the second strongest economy, after China, for the last two years.  But in December alone, inflation in Vietnam was at 50%.

This past week Vietnam announced a drastic draw down in exports.
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A year ago, Vietnam’s exports were rising at a rate of 29.2 percent.  Economic analysts said this year’s rise would exceed 32%.  But because of the weaker U.S. dollar and the slower world-wide economy, Vietnam’s exports in the first quarter would only grow 23.7 percent from a year earlier

In China, manufacturing and exports were way off for the first quarter.  But China said much of that was due to the staggering snowfall and cold this past winter.

“There is persistent credit uncertainty. Market players have been repeatedly let down which shows the subprime mortgage problems are so deep-rooted,” said Atsuji Ohara, global strategist of Shinko Securities in Tokyo.

“Just buying an investment bank does not solve the problem,” he said. “Markets are prodding (the U.S. government) to inject public funds.”
Bear Stearns's headquarters overlooks the flag for neighboring ... 
Bear Stearns’s headquarters overlooks the flag for neighboring JP Morgan Chase headquarters in New York on Friday, March 14, 2008. The Federal Reserve invoked a rarely used Depression-era procedure Friday to bolster troubled Bear Stearns Cos. and said it will provide even more help to combat a serious credit crisis. JPMorgan Chase is providing an undisclosed amount of secured funding to Bear for 28 days, backstopped by the Federal Reserve Bank of New York.
(AP Photo/Mark Lennihan)

There is, of course, good news.  There always is.

If you sell your gold jewelry right now you’ll make a record profit.  Reuters reports that gold prices shot up more than 3 percent Monday to fresh record highs as investors stepped up buying of the yellow metal, whose luster has increased due to the dollar’s weakness and deepening U.S. financial woes.

“This morning’s moves by the Fed clearly tell how serious the situation is in the United States. Gold is drawing a lot of safe-haven demand as you can’t buy stocks or currencies because of this volatility,” said Shuji Sugata, manager at Mitsubishi Corp Futures and Securities Ltd. Mr. Sugata wa quoted by Reuters.

Gold’s attraction as an alternative investment has helped boost the precious metal’s price by more than 20 percent this year alone, as it hit successive record highs along the way.

Gold was up 32% in 2007.
Gold bars are displayed at the headquarters of Mitsubishi Materials ...

Gold bars are displayed at the headquarters of Mitsubishi Materials Corporation in Tokyo, January 9, 2008. Gold prices shot up more than 3 percent on Monday to hit fresh record highs as investors stepped up buying of the yellow metal, whose luster has increased due to the dollar’s weakness and deepening U.S. financial trouble.(Toru Hanai/Reuters)