{"id":348,"date":"2008-03-14T22:26:03","date_gmt":"2008-03-15T03:26:03","guid":{"rendered":"http:\/\/club.ino.com\/trading\/2008\/03\/14\/378-days-ago-we-nailed-this-market\/"},"modified":"2008-09-05T18:08:51","modified_gmt":"2008-09-05T22:08:51","slug":"378-days-ago-we-nailed-this-market","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2008\/03\/378-days-ago-we-nailed-this-market\/","title":{"rendered":"378 days ago we nailed Bear Stearns"},"content":{"rendered":"<p><span style=\"font-size: medium;\">MarketClub members nailed Bear Stearns 378 days ago.<\/span><\/p>\n<p><span style=\"font-size: medium;\"><a href=\"http:\/\/broadcast.ino.com\/education\/bear_stearns\/?blog\"><img loading=\"lazy\" decoding=\"async\" src=\"\/uploads\/Image\/Video%20Reel.gif\" alt=\"\" hspace=\"10\" width=\"39\" height=\"46\" align=\"left\" \/><\/a> Check out this <a href=\"http:\/\/broadcast.ino.com\/education\/bear_stearns\/?blog\">video on Bear Stearns<\/a>, and see how MarketClub's Trade Triangle technology saved the day, and made a ton of money for short sellers.<\/span><\/p>\n<p><span style=\"font-size: medium;\">We are also pleased to announce that INO.com and MarketClub.com will be carrying Associated Press AP stories in the very near future.<\/span><\/p>\n<p><span style=\"font-size: medium;\">So for news, quotes, trading videos and charts, look no further than INO.com and MarketClub.<\/span><\/p>\n<p><span style=\"font-size: medium;\">Watch this brand new video and see how you can personally benefit from this totally non-emotional approach to analyzing any market, including the meltdown in Bear Stearns stock price.<\/span><\/p>\n<p><span style=\"font-size: medium;\">This story is taken from the Associated Press wire, and is a sample of what you will be able to read on <a href=\"http:\/\/ino.com\">INO.com<\/a> and <a href=\"http:\/\/marketclub.com\">MarketClub.com<\/a> in the very near future.<\/span><\/p>\n<p><span style=\"font-size: medium;\">Enjoy the video.<br \/>\n<img loading=\"lazy\" decoding=\"async\" src=\"\/uploads\/Image\/adamnew.jpg\" alt=\"\" hspace=\"10\" width=\"100\" height=\"76\" \/><a href=\"http:\/\/club.ino.com\/trading\/about-adam-hewison\/?jal_no_js=true&amp;poll_id=36\"><br \/>\nAdam Hewison<\/a><br \/>\nPresident, <a href=\"http:\/\/ino.com\">INO.com<\/a><br \/>\n--------------<br \/>\nAP<br \/>\n<strong> Bear Stearns Bailed Out by Fed, JPMorgan<\/strong><br \/>\nFriday March 14, 2:10 pm ET<br \/>\nBy Stephen Bernard and Joe Bel Bruno, AP Business Writer<br \/>\n<strong> Teetering Bear Stearns Gets Bailout From Federal Reserve, JPMorgan Chase<\/strong><\/span><\/p>\n<p><span style=\"font-size: medium;\">NEW YORK (AP) -- Bear Stearns Cos., one of the most venerable names on Wall Street, turned to a rival bank and the federal government for a last-minute bailout Friday to prevent it from collapsing.<\/span><\/p>\n<p><span style=\"font-size: medium;\">The Federal Reserve responded swiftly to pleas from Bear Stearns that its coffers had \"significantly deteriorated\" within a 24-hour period as rumors about the bank's situation fueled the Wall Street version of a run on the bank. Central bankers tapped a rarely used Depression-era provision to provide loans, and said they were ready to provide extra resources to combat an erosion of confidence in America's biggest financial institutions.<\/span><\/p>\n<p><span style=\"font-size: medium;\">Nearly half the value of Bear Stearns, or about $5.7 billion, was wiped out in a matter of minutes as investors felt the bailout signaled that the credit crisis has reached a more serious stage, and now threatens to undermine the broader financial system -- and the U.S. economy.<\/span><\/p>\n<p><span style=\"font-size: medium;\">\"My guess is by next week, there will be rumors of other large, familiar institutions\" that might be in financial trouble similar to Bear Stearns, said Anil Kashyap, a professor at the Graduate School of Business at the University of Chicago.<\/span><\/p>\n<p><span style=\"font-size: medium;\">Bear Stearns, the nation's fifth-largest investment bank, made its fortune dealing in opaque mortgage-backed securities -- a strategy that backfired amid the worst housing slump in a quarter century. The bank has racked up $2.75 billion in write-downs since last year, and releases first-quarter results on Monday that could show more losses.<\/span><\/p>\n<p><span style=\"font-size: medium;\">Alan Schwartz, Bear Stearns' chief executive, said the bank had enough money to keep operating at the start of the week. However, market speculation swelled Thursday -- leading investors, customers and lenders to withdraw their business or rescind credit lines.<\/span><\/p>\n<p><span style=\"font-size: medium;\">By that night, Schwartz said the bank recognized that the pace of withdrawals could outstrip the company's resources. He then contacted JPMorgan Chase &amp; Co. -- the third-largest U.S. commercial bank -- for help.<\/span><\/p>\n<p><span style=\"font-size: medium;\">JPMorgan, which has been hurt far less by the mortgage morass than other investment banks, is providing secured funding to Bear Stearns for 28 days, and those loans will in essence be insured by the Federal Reserve. Schwartz said this will buy Bear Stearns time -- allowing it to \"convince customers and counterparties that we have the ability to fund ourselves every day, to do business as usual.\"<\/span><\/p>\n<p><span style=\"font-size: medium;\">Schwartz confirmed, as many on Wall Street suspected, that Bear Stearns could now be up for sale. He told analysts during a conference call that the short-term funding \"is a bridge to a more permanent solution.\" Bear Stearns is working with investment bank Lazard Ltd. to explore its options.<\/span><\/p>\n<p><span style=\"font-size: medium;\">Top executives from Bear Stearns and JPMorgan were discussing the outright sale of Bear Stearns to JPMorgan, according to a person familiar with the talks who was not authorized to speak on the record.<\/span><\/p>\n<p><span style=\"font-size: medium;\">The next 28 days could provide JPMorgan with the time needed to complete due diligence on Bear Stearns before buying the company, giving detail about how much risk is on the books.<\/span><\/p>\n<p><span style=\"font-size: medium;\">JPMorgan is considered to have one of the strongest balance sheets among Wall Street banks, and is not already involved in a rescue like Bank of America's purchase of Countrywide. In a memo sent to employees, Schwartz said the temporary financing would allow the company to \"get back to business as usual.\"<\/span><\/p>\n<p><span style=\"font-size: medium;\">Bear Stearns, which has about 14,000 employees worldwide, has struggled since two hedge funds under its control lost billions of dollars after investing heavily in securities backed by pools of subprime mortgages.<\/span><\/p>\n<p><span style=\"font-size: medium;\">\"They were the dominant firm for repackaging mortgages,\" said Andrew Wilkinson, senior market analyst at Interactive Brokers Group LLC. \"That's where all earnings came from. They had the least diversified earnings stream of all of Wall Street securities firms, and as a result, they're paying the price today.\"<\/span><\/p>\n<p><span style=\"font-size: medium;\">As delinquencies and defaults swelled among subprime mortgages -- given to customers with poor credit history -- investors shied away from purchase securities backed by the troubled loans. Those fears expanded to encompass all but the safest bonds and securities, forcing investment banks to significantly reduce the value of their holdings and drying up liquidity throughout the market. The broader financial services sector has amassed nearly $160 billion in write-downs since the middle of last year.<\/span><\/p>\n<p><span style=\"font-size: medium;\">JPMorgan Chase said the financing would not expose its company to any material risk, though its shares dropped 3.6 percent, or $1.37, to $36.74. Bear Stearns plummeted 39 percent, or $22.50, to $34.50. The news rattled investors around the world, pushing the Dow Jones industrial average down about 225 points and pulling other indexes lower.<\/span><\/p>\n<p><span style=\"font-size: medium;\">AP Business Writers Madlen Read in New York and Martin Crutsinger in Washington contributed to this report.<br \/>\n<\/span><\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>MarketClub members nailed Bear Stearns 378 days ago. Check out this video on Bear Stearns, and see how MarketClub's Trade Triangle technology saved the day, and made a ton of money for short sellers. We are also pleased to announce that INO.com and MarketClub.com will be carrying Associated Press AP stories in the very near [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":41,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-348","post","type-post","status-publish","format-standard","hentry","category-trading-tips"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v23.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>378 days ago we nailed Bear Stearns - INO.com Trader&#039;s Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ino.com\/blog\/2008\/03\/378-days-ago-we-nailed-this-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"378 days ago we nailed Bear Stearns - INO.com Trader&#039;s Blog\" \/>\n<meta property=\"og:description\" content=\"MarketClub members nailed Bear Stearns 378 days ago. Check out this video on Bear Stearns, and see how MarketClub&#039;s Trade Triangle technology saved the day, and made a ton of money for short sellers. 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