JP MORGAN BUYS BEAR STEARNS FOR $2 PER SHARE

As the central bank looks for answers for today's credit crisis, one sharp move is for JP Morgan to buy Bear Stearns. This investment bank could not go under, "It would be apocalyptic," says Marino Marin and investment banker.
This is a serious situation and the Fed had to make something happen. You have to wonder how much JP Morgan wanted Bear Sterns, or were they told to take or watch it fall?????

From CNBC on line:
JP Morgan Agrees to Buy Bear Stearns for $2 a Share
By Reuters 16 Mar 2008 07:33 PM ET
JPMorgan Chase set a deal to buy stricken rival Bear Stearns for a rock-bottom price, while the U.S.Federal Reserve expanded lending to securities firms for the first time since the Great Depression to prop up the financial system.
CNBC.com
The shock news, the biggest sign yet of how devastating the credit crisis is for Wall Street, slammed the U.S. dollar to a record low against the euro, pummeled Asia stock markets and boosted gold and low-risk bonds.

http://www.cnbc.com/id/23663919

FEDRERAL RESERVE BAILS OUT BEAR STEARNS

Yes, the Fed to the rescue. I am not an expert on this issue, but here is what I understand. A European bank refused to extend credit to Bear Stearns, which effectively declared Bear Stearns as insolvent. This caused a run on the bank.
The Federal Reserve met last night and allowed an emergency EXCEPTION:
1. JP Morgan, the clearing house for Bear Stearns, was to be allowed to bring Bear Stearns collateral to the Fed's discount window. This would allow Bear Stearns to raise CASH.
2. JP Morgan would not be liable should Bear Stearns default to the Fed.
Bear Stearns reportedly has about $400 Billion of the not so good real estate loans in their portfolio. No one knows what their value is due to the changing real estate market.
Read More: http://money.aol.com/news/articles/_a/fed-pledges-to-supply-cash/20080314104309990001
and More : http://www.bloggingstocks.com/2008/03/14/why-does-bear-stearns-need-a-government-bailout/