Now we'll know

This description of the scene at Bear Stearns' high-rise headquarters reminds me of the opening scene of Monty Python's "The Meaning of Life" -- you know the one, a send-up of corporate takeovers that has skyscrapers sailing down the streets like tall-masted ships, pirate raiding parties jumping from one building to another. From the Associated Press:

"At Bear Stearns' 47-story headquarters in midtown Manhattan, many employees said they still couldn't believe that the nation's fifth-largest investment bank is -- essentially -- out of business. Employees ... said there was no meeting to inform (them of) what was happening... (they) trudged boxes of their personal belongings out of the investment bank while JPMorgan managers filed into it for the first time from that bank's headquarters directly across the street. While no layoffs have been announced, analysts expect that they could be significant."

Bear Stearns employs 14,000 worldwide, the story noted, and J.P. Morgan is mostly interested in the company's prime brokerage business -- they do trades for big investors like hedge funds.

While much of the focus on this has been on the $236 million selling price -- "roughly 1 percent of what the investment bank was worth just 16 days ago," the story reminds us -- don't forget JP Morgan is taking on Bear's liabilities (or we all are, I guess, since the Fed is guaranteeing up to $30 billion of the company's risky bets on mortgage-backed securities and other forms of debt).

In talking to California Association of Realtors economist Leslie Appleton-Young today about this and other credit crunch developments, she said that while financial markets can usually take bad news (and good) in stride, what they can't handle is uncertainty.

If there's one thing Bear Stearns might provide us in its death throes, it's a little certainty. As AP put it (in a story that's focused on who might be next):

"(T)he financial industry wants to know exactly how badly Bear Stearns bet on mortgage-backed investments. Unwinding the nation's fifth-biggest investment houses should provide some insight into what other financial institutions might have on their books."

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