ON BEAR STEARNS AND THE MARKETS

FIRE-SALE

On the closing of the markets this Friday, I posted the following on Twitter:

"Whew, markets finally close. Haven't felt like this since Oct. 16, 1987 going into the weekend before Oct. 19: http://tinyurl.com/y9nox"

The events of this Sunday have reinforced that feeling of deja vu, as the Wall Street reports online:

"Bear Sells for $2 a Share; Fed Cuts Discount Rate

Bear Stearns Cos. reached an agreement to sell itself to J.P. Morgan Chase & Co., as worries grew that failing to find a buyer for the beleaguered investment bank could cause the crisis of confidence gripping Wall Street to worsen.

The deal calls for J.P. Morgan to pay $2 a share in a stock-swap transaction, with J.P. Morgan Chase exchanging 0.05473 share of its common stock for each Bear Stearns share.

Both companies' boards have approved the transaction, which values Bear Stearns at just $236 million based on the number of shares outstanding as of Feb. 16. At Friday's close, Bear Stearns's stock-market value was about $3.54 billion.

It finished at $30 a share in 4 p.m. New York Stock Exchange composite trading Friday."

This of course is extraordinary stuff, showing how the fifth largest investment bank in the country, valued at over $170/share a year ago, could be forced to sell itself at less than fire-sale prices.

Obviously, Monday, March 17th, and the rest of this week promise to be a volatile one to say the least, with several major investment banks reporting results, and the largest IPO in U.S. history for Visa, gets priced on Wednesday.

Here's to getting through the week of March 17 and beyond at least as well as we made it through the week of October 19, 1987, and beyond.