The Tip of the Iceberg: JP Morgan and Bear Stearns (A) Harvard Case Solution & Analysis

Bear Stearns & Co. burned through almost all of its $ 18 billion in cash reserves during the week of March 10, 2008, and an unprecedented provision of liquidity support from the Federal Reserve on Friday 13 March, it was not enough to reverse the decline in Bear. Federal Reserve Chairman Benjamin Bernanke, Treasury Secretary Henry Paulson and New York Fed President Timothy Geithner were intent on limiting issues bear on the broader financial system. James "Jamie" Dimon, chairman of Morgan and Chief Executive Officer, has been in constant contact with these regulators over the weekend March 14-16, the negotiations on the possible scenarios rescue Bear, without which it will be forced to bear him to seek bankruptcy when the markets opened on Monday. Late on Sunday, March 16, the board accepted the Bear Morgan, to buy Bear for $ 2 a share, an offer that would not have been made without substantial assistance to the government. There was hope that the salvation of the bear will prevent far-reaching spread of damage to a large financial world that many politicians is seen as likely to follow the collapse of a major investment bank. This case is considered a landmark event in the financial and economic crisis that began in the summer of 2007, and provides a background for understanding the full crisis, as it turned out, during the summer and fall of 2008. It was written to address two sets of issues. First, it provides an understanding of corporate finance capital and liquidity, and the firm estimates. Second, the case allows you to explore aspects of internal and external control of the company, as well as problems navigating the crisis, when faced with compelling pressure from competing stakeholders. "Hide
by Daniel B. Bergstresser, Clayton Rose, David Lane Source: Harvard Business School 37 pages. Publication Date: January 22, 2009. Prod. #: 309001-PDF-ENG

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