By DAN DORFMAN
Special to the Sun
March 17, 2008
Investors are bracing for a bad day on Wall Street today as news broke last night that JPMorgan Chase & Co. was buying the nation’s fifth-largest investment bank, Bear Stearns Cos., for just $2 a share, or little more than $236 million.
“You could see panicky, scary trading Monday that initially could drive the Dow down 400 to 500 points,” a San Francisco money manager, Gary Wollin, said yesterday. As of press time last night, the Asian markets were already slipping, with Japan’s benchmark Nikkei stock index sliding more than 3%.
In an attempt to calm today’s markets, the Federal Reserve announced last night it would cut the rate on direct loans to commercial banks by a quarter-point to 3.25%, and extend the maximum term of discount-window loans to 90 days from 30 days.
“Bear Stearns is lucky to get anything for the firm,” a professor of economics at the University of Maryland, Peter Morici, said. “The hidden liabilities and potential lawsuits are huge.”
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