Bloody MondayNo matter what happens next, today was a day that will be remembered.
ByJessica Pressler
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There May Be a Day When Port Authority Is Nice to Look AtWe know, we know — dare to dream, right? But there are proposals to build above it, and the renderings look lovely. Plus, news from the finance, law, real estate and media industries, in our daily roundup.
white men with money
Will Ben Bernanke Tell Us the Secrets of the Island?Federal Reserve chairman Ben Bernanke is testifying in front of the Joint Economic Committee today about Bear Stearns and all of the other crazy stuff the Fed has been doing lately.
Lehman to World: ‘And I Am Telling You I’m Not Going’
After this weekend’s deal to sell collapsing investment bank Bear Stearns to JPMorgan, market watchers were frantically scanning the horizon to see which financial firm might be next. The name on everybody’s lips turned out to be Lehman Brothers. The bank, whose profile is similar to that of Bear Stearns, was a major player in the subprime-mortgage market as of last summer, and its shares have tumbled from $82 then to $31.75 last night. It’s also the smallest of the most important Wall Street power firms. But Lehman CEO Richard Fuld aggressively made it clear yesterday that if there is in fact a domino effect among the firms, it won’t be his company that will be tumbled first. Why?
• Because Lehman learned a ton from a similar crisis in 1998, after a panic over Russian debt, and returned stronger.
• As a result, they have a much higher level of liquidity this time around. Like, $35 billion in cash and liquid assets, on top of $160 billion in “unencumbered” assets, so it can borrow more.
white men with money
World Reels After Bear Stearns Is Sold For Pocket Change“This is like waking up in summer with snow on the ground,” Ron Geffner, a former SEC lawyer, told the Times of the news that last night JPMorgan, aided by the Federal Reserve Bank, bought Bear Stearns at a shocking 93 percent discount on Bear’s Friday closing price: $2 a share, or $236 million. Including the Madison Avenue headquarters, a property valued at least $1.2 billion. It was a nice present for JPMorgan CEO Jamie Dimon, who celebrated his 52nd birthday on Thursday, but not so much for the world economy: Although the last-minute buyout was supposed to stem the credit crisis and, as the Fed said yesterday, “bolster market liquidity and promote orderly market functioning,” it seems to have done precisely the opposite. Markets in Europe and Asia tanked overnight, the dollar plunged, and trading on Wall Street is hobbled by fears of a domino effect. Today’s economic conditions are “the most wrenching since the end of the second World War,” Alan Greenspan told CNN. Fortunately, it’s Saint Patrick’s Day, so even though there’s no green circulating in the market, there is green beer. Drink up, folks. It’s going to be a long, depressing ride.
JP Morgan Pays $2 a Share For Bear Stearns [NYT]
A Deal For Bear Stearns [WSJ]
Press Release [Federal Reserve]
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Hillary Clinton Dismays Anna WintourMEDIA
• Anna Wintour took Hillary Clinton to task for backing out of her Vogue photo shoot because she feared looking “too feminine.” Wintour: “The notion that a contemporary woman must look mannish in order to be taken seriously as a seeker of power is frankly dismaying.” Ouch. [WWD]
• The Directors Guild showed up the writers in striking, heh, fashion: After just one week of negotiations, the directors struck a deal with the studios that includes the all-important online-video money. The writers are cautious, though, since the last time they followed the directors’ lead they got screwed on the home-video market. [WP]
• Wal-Mart, responsible for 20 percent of all “newsstand” magazine sales, announced it would dump more than 1,000 titles from its shelves. Shocking twist: The New Yorker stays, but Boar Hunter Magazine is out! [NYP]
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Howard Stern Is Quietly Gay-LovingMEDIA
• Howard Stern, good for the gays? A longtime lesbian listener calls Stern “one of the most pro-gay media personalities in the country.” [Gay.com]
• Murdoch finally gets his giant puffy hands on the Journal today at 10 a.m. The only question is just how much of the Bancroft family will try to show their noble intentions, however laughably inept, by registering a protest vote against the deal. [WSJ]
• A great new/old debate: Should Democrats go on Fox News? [Mixed Media/Portfolio, NYO]
