Bear Stearns

Will the shareholders go along?

Bear Stearns, JPMorgan, and various central banking and Treasury Dept. greybeards seem to have had a busy weekend, arranging the deal whereby JPM will buy Bear.

So desperate to sell itself was BS, in fact, that JPM got a fire sale price. That raises a question in my mind: will the deal hold?

In many respects, this is analogous to the deal in November 2001 whereby Dynegy agreed to buy what was left of rapidly-imploding Enron Corp. But there was a lot of room for slippage between contract and closing. And this one never came off.

And Enron had to enter bankruptcy, resulting in eventual liquidation, anyway.

In the case of Bear Stearns, the unravelling if it comes would take a somewhat different form than it took than. It may take the form of shareholder rebellion.

"Even the headquarters building and the land on which it stands would seem to be worth more than JPM is offering for the whole company." Expect to hear some form of THAT sentence more and more often in the days to come, until you'll think Wall Street has been taken over by Henry George's disciples.