This is a column about Bear Stearns from my favourite financial writer. I read all his columns, and wish I could have his investing discipline: buy lower, sell higher (instead, I always hold out for more because I know my hunches are right, and wind up with egg on my face and less money in the bank).
Here is exactly what I mean in Mr. Stewart's words:
I find it galling that so many on Wall Street extol the virtues of risk taking when the returns run in their favor. The minute they turn against them, it's "unfair." The howls from Bear Stearns shareholders were as predictable as they are self-serving.
Why J.P. Morgan, a firm not otherwise known for its altruistic impulses, would raise its offer is more puzzling. Apparently it didn't like the terms of the deal that it and its high-priced lawyers negotiated, since Morgan had to guarantee Bear Stearns's obligations even if shareholders rejected the deal. Why this should be our problem, as opposed to Morgan shareholders', is beyond me. If Morgan genuinely feels the original deal was too generous, then the government should reduce its guarantee not by the measly $1 billion it agreed to, but by enough to make the deal worth $2 a share. Maybe it's not too late; $15 billion might be a start.
Bear Stearns shares were trading this week above $11 — more than 10% above the latest sweetened offer. Having already feasted once at this trough, who can blame the arbitragers (yet another class of people who hardly deserve a bailout) for feeding once again?
That is the sort of straight, tough talk that is needed. Sadly, it's rare. To find it is a gift.
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