A post to react to the huge story that is the collapse of Bear Stearns in the US. BS, as it will hence forth be known, is an 85 year old bank and the 5th largest investment bank on Wall Street.
After the emergency Fed funding it is another Northern Rock, with a wrecked Brand and a questionable business model. It is interesting to see the wolves come out to buy it. JPMC who are the most likely acquirer were one of the few banks to avoid the worst of the sub-prime mess, although they are still credit crunched. Even our own RBS has suggested it may be interested in an acquisition.
However, RBS is just BS-ing here and trying to show how it is not is so much troubel itself; the acquisition of ABN is not going so well as yet to enable management to try another big buy and in addition its low capital ratio and haemorrhaging share price make this story pure spin.
In fact, my new poll will make for good reading later this week; we posted last week that some of our own institutions are in more trouble than they are letting on, will this contagion spread to London?