Story on attempts to get Bear sold before the opening tomorrow
Bear Stearns Racing Toward Selling Itself to JPMorgan - New York Times:
"There is little faith in the assigned or “marked” value of so many assets, including but not limited to mortgage-related securities. In fact, the experience of Bear Stearns proves that it is confidence, not capital, that topples even the savviest financial institutions."
And perceptions are everything
"Throughout much of its history, Bear Stearns has masterfully persuaded the market that its business — narrowly focused on mortgage finance — was worth more than it actually was. To some degree this trick has been a testament to the coy gamesmanship of two of its past leaders, Alan “Ace” Greenberg and Mr. Cayne.
Both men are devout bridge players, and Mr. Greenberg is an amateur magician to boot, so they are well schooled in the art of not showing their hand. Mr. Cayne’s hint eight years back — that he would sell the firm only for four times its book value — was even then a flight of financial fancy."
I had described it as poker, not bridge, but the idea's the same, you don't show your cards.
No wonder Paulson was cagey on ABC's This Week with George Stephanopoulos this AM.