JP Morgan Chase: On top of the world

In the executive suites at Bear Stearns, there was plenty of shock and anger. The $2 price tag, as people start to digest it, amounts to massive wealth transfer to JP Morgan. True, this is a something of a risk for JP Morgan Chase, but they've got the Fed standing at the ready with a credit facility that has helped all investment banks--notably Lehman Brothers--to breath easier. It's looking more and more like a home run for Jaime Dimon, the new King of Wall Street. The bank expects the deal will add $1 billion to its earnings when the integration is over, according to Portfolio. So the $236 million payment seems like a steal. The deal really turns on Fed involvement, which will give the bank time to wind down Bear positions. But you have to wonder what would have happened if the Fed facility were announced without the JP Morgan deal. Would Bear have survived?  

For more:
- here's the Portfolio item
- here's some background from the New York Times

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JP Morgan bets big on Bear Stearns. Article
Stock appreciation rights granted to Dimon. Article
Jaime Dimon's revenge. Article