Ali’s blog

Mostly quant stuff with occasional digressions

Shotgun wedding

Posted by alifinmath on March 17, 2008

A shotgun wedding arranged by the Feds:

JPMorgan Chase agreed on Sunday to buy Bear Stearns, the stricken US investment bank, for about $236m in shares in a deal that puts an end to Bear’s 85 years of independence and highlights the risks faced by banks during the credit crunch.

People close to the situation said the Fed and Treasury pressed for a deal before the opening of Asian markets on Monday morning because they wanted to stave off a run on other US and European banks.

This may presage the end of unfettered financial markets and the end of increasingly exotic financial products. As I’ve written elsewhere, we’re probably entering an era of tightly regulated and circumscribed financial markets. And this will probably have dire implications for the need for quant work. Be prepared to tighten your belts.

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