March 16 -- Bear Stearns Co's 85 years as an independent Wall Street firm may be
coming to an end as JPMorgan Chase and Co considers buying the crippled company.
Teetering on the brink of collapse from a lack of
cash, Bear Stearns got emergency funding on Friday from the United States
Federal Reserve and JPMorgan in the largest government bailout of a US
The move failed to avert a crisis of confidence among
Bear Stearns' customers and shareholders, who drove the stock down a record 47
After denying early last week that access to capital
was at risk, Bear Stearns Chief Executive Officer Alan Schwartz said the
company's cash position had "significantly deteriorated" by Friday.
The Fed agreed to provide financing through JPMorgan
for up to 28 days, the bank said in a statement.
Insiders said JPMorgan, led by Chief Executive
Officer Jamie Dimon, is now considering buying Bear Stearns, Bloomberg News
No agreement has been reached and it's possible no
deal will be completed, said the people, who declined be identified because the
discussions are confidential.
A JPMorgan insider said the bank may also be
interested in buying Bear Stearns' prime brokerage unit, which provides loans
and processes trades for hedge funds.
The Fed acted to prevent the failure of the
second-biggest underwriter of US mortgage bonds and forestall a potential market
panic as losses by banks and brokers reached US$195 billion and stocks plunged
for a third day last week.
"I don't think they can afford to let Bear go," said
Charles Geisst, the author of "100 Years on Wall Street," referring to the Fed
bailout. Bear Stearns, founded in 1923, acted in response to "market rumors" of
a liquidity crisis, Schwartz, 57, said in a separate statement.
(Source: Shanghai Daily)