I think this is the result of the implied government guarantee that most investors believe is far stronger in Europe.
However, now that the global financial system is so strongly intertwined I don't think the world financial system could handle a default resulting in the liquidation of any bank on the list.
So does that mean all these banks' default insurance should be trading at government rates?
Bear Stearns' Easter Basket Written By: Deborah Evans 2008-03-25 12:01:00 It seems that the parties involved in JPMorgan’s (JPM - $46.44) takeover of Bear Stearns (BSC - $10.87) like to work on the deal on holidays, Sundays, and when the Moon is Void-of-Course.*
Following are the bear facts about the “amended” deal between JPM and BSC. If The Wall Street Journal timeline is
accurate, Bear’s Board of Directors couldn’t possibly have fully read the deal
before agreeing to it, since CNBC announced it was approved just after the market
opened this morning.
Photo:Mellie, Creative Commons, Flickr
Could It be JP Morgan Buying Bear Common? Written By: David Neubert 2008-03-19 11:16:32 Could it be a Holy Mystery, like they told you in Catholic school, for anything that couldn't be explained? Steve Randy Waldman at Interfluidity.com has another theory on why Bear Stearns (BSC - $5.94) is trading above the $2.00. He offers up god, oh I mean Jamie Dimon, channeling J.P. Morgan. Could The House of Morgan be the one buying shares above the deal price to vote them their own way? I love the idea but I see securities law problems with that theory. I don't think JP Morgan would risk that.
I'll be watching to see what Mr Waldman comes up with next.
Disclosure: I own BSC. I own Bear Stearn Preferred shares. I am short 10 strike calls on BSC and long 15 strike calls. I own JPM. I did not go to Catholic school.
