What’s the fifth largest investment bank in the US worth anyways? Two dollars a share sounds like a good deal. As a stunning example of how bad housing credit bets have gone in the US, Bear Sterns has gone from a high price of $159.46 per share to being bought up by competitor JP Morgan Chase for $2 per share to avoid a total collapse.
The Fed will provide special financing for the deal to try to stop a spreading crisis of confidence in the global financial system. Bear Stern was founded in 1923 and survived the great depression, but apparently not the US housing bubble and resulting credit market fallout.
Meanwhile as far away as Britain the credit crunch has caused lenders to start removing offers for mortgages, push up prices and completely stop the practice of 100% financing. Will we start to see a tightening of credit creep into local mortgages soon?