Bear Stearns goes for pennies on the dollar

JPMorgan Chase is buying out subprime victim Bear Stearns at a steep discount. Bear, which was as recently as last year selling at $170/share went out at about $2.

The Federal Reserve Bank's response is to finance buyouts such as this, followed by promises of even more rate cuts on Tuesday. Estimates range from fifty to one hundred basis points. It's doubtful that this will stem the tide in the credit markets, and from an inflation perspective, it's a bit like pouring gasoline on a fire.

This is not a good day.