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JPMorgan buying Bear Stearns, Fed cuts discount rate (Finance, 62 articles)
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In announcing the surprise move , Ben Bernanke, chairman of the US central bank, said the Fed and Treasury were "working to promote liquid, well-functioning financial markets, which are essential for economic growth". The deal values the bank, which as been at the centre of the US mortgage debt crisis, at about $236m ($116m). The central bank approved a cut in its emergency lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created a lending facility for big investment banks to secure short-term loans. The difference is that Bear Stearns is not a commercial bank, and is therefore not eligible for the protections those banks received 75 years ago when Franklin D. Roosevelt halted bank runs with government guarantees. The fifth largest investment bank, Bear Stearns is a big factor in the credit default swaps market, a prime broker to many hedge funds, a primary dealer in the bond market and a counterparty to many leading Wall Street firms. The credit crisis on Friday engulfed one of Wall Street's most important investment banks as the Federal Reserve and JPMorgan Chase combined to provide emergency finance for 85-year-old Bear Stearns and prevent further upheaval in global markets.
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Other stories about Bear, Stearns and Fed:
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The Seattle Times: New ETFs arriving; proceed with care (Finance, 4 articles)
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There's going to be a raft of new exchange-traded funds (EFTs) opening the rest of this year, but chances are investors should ignore most of the new issues. The expected creation of hundreds of new funds is the logical outcome of two rule proposals and one rule change, approved recently by the Securities and Exchange Commission. If passed, as expected, after a comment period, the rules will streamline the approval process for ETFs, turning something that was tedious, time-consuming and difficult into a walk in the park.
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Analysts: Microsoft can buy Yahoo without raising bid (Finance, 5 articles)
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The Web pioneer subsequently rejected Microsoft's offer, which currently values Yahoo at $41.4 billion, saying the takeover bid "substantially undervalued" the company. Google executives are quietly rehearsing their arguments against Microsoft's approach to Yahoo in internal discussions which could indicate the search group's lobbying strategy once a bid comes before regulators. Their concern that Microsoft could extend its dominance of the desktop to become the leader in online display advertising seems, however, not to be shared by those who would be most directly affected: advertisers.
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Nikkei Falls 1.5 Percent on Weak Dollar (Finance, 4 articles)
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Major Asian stock markets fell sharply in early trading on Monday as pessimism continued to spread despite the Fed's dramatic moves over the weekend, sending Tokyo's benchmark index to a three-year low. The benchmark Nikkei 225 stock index fell 191.84 points, or 1.54 percent, to 12,241.60 on the Tokyo Stock Exchange, also marking the index's lowest close since Aug. 10, 2005. Traders said the near-term outlook is unclear, with a string of economic data due out next week and many investors watching Washington for signs of more financial measures to buoy markets.
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Alitalia taken over by Air France-KLM in €138m deal (Finance, 4 articles)
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The board of Alitalia, Italy's loss-making, debt-laden and partly state-owned airline, has agreed to a €138 million ($106 million) takeover offer from Air France-KLM, one of the world's biggest carriers. Barring any last-minute obstacles and subject to government and union approval, it should end a 13-month saga in which numerous attempts to find a viable buyer for the airline had come to nothing. Attempts to sell the national carrier caused a dispute within the Italian Government, with the radical Left opposed to foreign buyers and to the inevitable loss of jobs.
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Rivals line up in race to bring Olympic Games to mobile phones (Finance, 4 articles)
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The 2012 Olympic Games will do for mobile TV what the Coronation did for early television, an industry expert has predicted, as mobile operators face the decision over which technology to use. Preparation for that future will gather pace next month with the auction of the L-Band spectrum, which is well-suited to the demands of mobile TV. Sharp is set to start selling its mobile phones in China ahead of the Beijing Olympics this year in a rare overseas foray by one of Japan's leading consumer electronics companies.
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blaster@cs.columbia.edu
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