8:00. Phone lines are busy but the audio webcast is working. The slide presentation is very short. Obviously they didn't have a long time to put this together.
8:05. Details follow what has been reported. All stock deal.
8:09. No MAC clause in purchase agreement. Guess its hard to imagine what could possibly be a MAC for Bear Stearns. Could things get any worse? JP Morgan has protections against other bidders but, they needlessly stressed, they don't expect competing buyers to enter the scene. No kidding.
8:10. JP Morgan putting a guarantee over Bear Stearns trading positions. Meant to reassure counter-parties. Stop the blood loss.
8:17 It sounds like the prime brokerage, fixed income and energy trading.
8:19. Short presentation. Blogging the question period after the jump.
8:18. First question: Is Bear Stearns still in business. "Bear Stearns is aboslutely open for business, that's the purpose of the guarantee we put in place," JP Morgan spokesperson says.
8:19. What happens to the guarantee if shareholders don't approve the transaction? The guarantee covers all transactions currently in place and all those put in place in the future. Even if the transaction does not close, guarantee will apply to every transaction put in place up through the rejection by JP Morgan shareholders. It applies through the life of transactions, JP Morgan says.
8:24. Good question about how to reconcile the alleged $80 per share book value and todays $2 per share price. JP Morgan doesn't say it directly, but Bear's liabilities must be severe. Somewhere Meredith Whitney is smiling.
8:27. JP Morgan says it didn't find any serious risk management problems. Describes Bear Stearns as a well-run company.
8:29. People are trying to get to details of this guarantee. Covers all trades on the books, all trades that could get put on the books from now until the deal falls apart (assuming it does), and then stays in place over twelve months.
8:31. Individual shareholder is disgruntled. You can almost see the thought bubbles: "Who let this guy on the call?" He asks about Bear Stearns and is told, "You'll have to ask Bear that question." Shareholder fires back: "I vote not to approve this sale." Awkward silence. "Next question!"
Credit Suisse analyst asks about what's left of prime brokerage business after counter-parties ran for exits. JP Morgan says its too early to get into details but they are confident about health of franchise. Uh-oh.
8:35. Bear Stearns does own it's building, which means JP Morgan is getting a huge piece of midtown real-estate as part of the deal. By our math (which is shaky even when we haven't been drinking all day), that means either the building or the business is worth something like negative $400 million.
8:36. And that's all folks. Done and done.