Well. According to Reuters and other sources, JPMorgan is readying to quintuple its bid for Bear Stearns, from $2 a share to $10. This should make crybaby shareholders like Jimmy Cayne and British billionaire Joseph C. Lewis — who said last week that he'd block a sale at that price "by any means necessary" — happy, but it does put the Fed in a pickle. While they could justify a $2 bailout price as rescue tinged with punishment — much like parents might ground a hard-drinking teenager after taking him to the hospital to get his stomach pumped — if they back a deal with a higher share price, it could just look like, well, a bailout. As of last night, the Fed was balking. As of this morning, Bear stock had gone up 65 percent in anticipation of a deal. Your move, Bernanke.
JPMorgan to raise offer for Bear Stearns: Report [Reuters]
UPDATE: It's official: JPMorgan has upped its bid to $10 a share, and the Fed has gone along with it on the same terms. Guess they're not as strict as our parents. [NYT/DealBook]