Bear Stearns Sinks 90% in $2 Rescue Days After Cramer Defends Liquidity

Jim Cramer: "Bear Stearns is Fine!" Tues, 3/11/08 — politiclips

politiclips

A federally backed $2-a-share emergency sale of Bear Stearns to JPMorgan Chase effectively values toxic assets near zero and unleashes sector-wide bank contagion, days after Jim Cramer assured investors the firm was secure.

AI-assisted summary of Jim Cramer: "Bear Stearns is Fine!" Tues, 3/11/08 — original source. Check the original for full context.

Source published:

Key ideas

  • Jim Cramer emphatically dismissed investor liquidity concerns regarding Bear Stearns on CNBC, insisting the firm was fine and advising against pulling funds. (0:00)
  • Following a Federal Reserve-backed emergency intervention over the weekend, JPMorgan Chase agreed to acquire Bear Stearns for just $2 a share. (0:20)
  • Bear Stearns stock plunged approximately 90% at the open, marking a devastating collapse for Wall Street's fifth largest investment bank. (0:20)
  • The fire-sale valuation effectively priced hard-to-value securities at near zero, triggering severe market contagion across peer investment banks. (0:20)

Detailed notes

## Background Published on YouTube by the channel politiclips on March 17, 2008, this video captures CNBC host Jim Cramer adamantly assuring viewers that Bear Stearns is fine just days before the bank's historic collapse. According to the description, Cramer passionately urged investors not to withdraw their money when the stock traded above $60, only for the Federal Reserve to broker an emergency bailout sale to JPMorgan Chase at $2 per share shortly thereafter.

## TL;DR The video opens with Jim Cramer responding to a viewer named Peter regarding liquidity concerns at Bear Stearns, forcefully declaring that the firm is not in trouble and that pulling money out would be silly. The clip then cuts sharply to a grim market broadcast detailing the aftermath of an emergency, Fed-backed weekend rescue where JPMorgan Chase acquired Bear Stearns for a mere $2 a share. With Bear Stearns shares plunging 90% at the open, the reporting details how the near-zero valuation of toxic assets triggered widespread contagion across the financial sector. Other major institutions suffered immediate fallout, including Lehman Brothers plummeting nearly 30% alongside steep drops for Goldman Sachs and Citigroup.

## Atmosphere & style The video delivers an abrupt, jarring contrast between manic confidence and cold financial catastrophe. It begins with Cramer’s trademark bombastic, high-decibel defiance, treating legitimate investor panic as an absurd overreaction. That bluster cuts instantly into the somber, shock-laden tone of an emergency news report, evoking a chilling sense of dramatic irony as the catastrophic fallout and market devastation unfold across Wall Street.

## Bulletin - [00:00](https://www.youtube.com/watch?v=gUkbdjetlY8&t=0s) Jim Cramer emphatically dismissed investor liquidity concerns regarding Bear Stearns on CNBC, insisting the firm was fine and advising against pulling funds. - [00:20](https://www.youtube.com/watch?v=gUkbdjetlY8&t=20s) Following a Federal Reserve-backed emergency intervention over the weekend, JPMorgan Chase agreed to acquire Bear Stearns for just $2 a share. - [00:20](https://www.youtube.com/watch?v=gUkbdjetlY8&t=20s) Bear Stearns stock plunged approximately 90% at the open, marking a devastating collapse for Wall Street's fifth largest investment bank. - [00:20](https://www.youtube.com/watch?v=gUkbdjetlY8&t=20s) The fire-sale valuation effectively priced hard-to-value securities at near zero, triggering severe market contagion across peer investment banks.

## Key takeaways - [00:00](https://www.youtube.com/watch?v=gUkbdjetlY8&t=0s) In response to a viewer inquiry, Jim Cramer forcefully rejected concerns that Bear Stearns faced a liquidity crisis. - [00:00](https://www.youtube.com/watch?v=gUkbdjetlY8&t=0s) Cramer insisted Bear Stearns was fundamentally safe and urged clients not to take money out of the firm, calling such an action 'silly.' - [00:00](https://www.youtube.com/watch?v=gUkbdjetlY8&t=0s) Cramer argued Bear Stearns was far more likely to be an acquisition target than to collapse. - [00:20](https://www.youtube.com/watch?v=gUkbdjetlY8&t=20s) Just days after Cramer's broadcast, the Federal Reserve engineered an emergency weekend bailout for Bear Stearns. - [00:20](https://www.youtube.com/watch?v=gUkbdjetlY8&t=20s) JPMorgan Chase agreed to acquire Bear Stearns for $2 per share, representing an extraordinary drop from its recent trading levels. - [00:20](https://www.youtube.com/watch?v=gUkbdjetlY8&t=20s) Bear Stearns shares plummeted roughly 90% at the market open following the buyout announcement. - [00:20](https://www.youtube.com/watch?v=gUkbdjetlY8&t=20s) The collapse eliminated billions in market value from what had been the fifth largest U.S. investment bank, previously trading as high as $160 to $171. - [00:20](https://www.youtube.com/watch?v=gUkbdjetlY8&t=20s) Market analysts warned the $2 buyout effectively benchmarked the value of difficult-to-price balance sheet assets at nearly zero. - [00:20](https://www.youtube.com/watch?v=gUkbdjetlY8&t=20s) Lehman Brothers shares plummeted roughly 30% due to business model similarities and comparable fixed-income exposure to Bear Stearns. - [00:20](https://www.youtube.com/watch?v=gUkbdjetlY8&t=20s) Broad banking contagion dragged other financial heavyweights down, with Goldman Sachs and Citigroup each dropping 8%.

## Detailed walkthrough ### [00:00](https://www.youtube.com/watch?v=gUkbdjetlY8&t=0s) Jim Cramer's Advice on Bear Stearns Liquidity

Jim Cramer fields an incoming question from a viewer named Peter, who asks whether he should be concerned about Bear Stearns' liquidity and pull his capital out of the firm. Cramer immediately shuts down the concern with high-energy defiance, forcefully telling the viewer that Bear Stearns is fundamentally sound and that withdrawing funds would be a mistake. He insists that the firm is nowhere near failure, suggesting instead that the firm is far more likely to end up as an acquisition target than to collapse.

Cramer ridicules the idea of an investor panic or a run on the firm, urging viewers to stay put rather than overreact to market fears. As Jim Cramer emphatically asserts: “No, no, no! Bear Stearns is fine. Do not take your money out.” He doubles down on dismissing the risk, stating: “Don't move your money from Bear. That's just being silly. Don't be silly.”

[00:20](https://www.youtube.com/watch?v=gUkbdjetlY8&t=20s) The $2-a-Share Bailout and Sector Contagion

The broadcast cuts to a market update highlighting widespread devastation across Wall Street, driven entirely by the financial sector following a Federal Reserve-backed emergency intervention for Bear Stearns over the weekend. Bear Stearns shares plunge 90% at the open after JPMorgan Chase, backed by the Fed, steps in to acquire the struggling firm for just $2 a share. The sale marks a catastrophic collapse for what had been the fifth largest investment bank on Wall Street, whose stock had traded at $80 recently and as high as $160 the previous year.

The emergency transaction sends shockwaves through the entire banking sector, as the rock-bottom sale price effectively values toxic, hard-to-price balance sheet assets at nearly zero. The reporter explains the systemic fallout: “It is significant in that it is establishing a price for some of these hard-to-value securities. And as you are well aware, that price is pretty much zero.” The resulting sell-off hits rival investment banks heavily reliant on similar business models:

- **Bear Stearns**: Plunges roughly 90% in early morning trading following the $2-per-share rescue. - **Lehman Brothers**: Plummets nearly 30% due to its comparable business model and heavy exposure to fixed income. - **Goldman Sachs**: Drops 8% amid the sector-wide downturn. - **Citigroup**: Falls 8% as banking contagion spreads across the board.

## Notable quotes > [00:00](https://www.youtube.com/watch?v=gUkbdjetlY8&t=0s) No, no, no! Bear Stearns is fine. Do not take your money out. — Jim Cramer

## Mentioned Jim Cramer, Bear Stearns, JPMorgan Chase, Federal Reserve, Lehman Brothers, Goldman Sachs, Citigroup, CNBC

## Video description CNBC's Jim Cramer screams that "Bear Stearns is fine!" and "NO! NO! NO!" ... "Bear Stearns is not in trouble" ... "Don't move your money from Bear! That's just silly! Don't be silly!" to investors while Bear Stearns was still trading at over $60 a ahare, down from a high of $171 just over a year ago ( http://dealbook.blogs.nytimes.com/2008/03/14/bear-stearns-week-from-hell/ ). This just 5 days before Bear Stearns sold to JP Morgan for $2 a share, in a Fed brokered bailout.

Reuters (03.16.08): "Bear's stock closed on Friday at $30.85, valuing it at $3.5 billion, after tumbling 46 percent that day. Shares in the fifth largest U.S. investment bank, which employs more than 14,000 people, hit a record high of more than $171 in January 2007. ..." http://www.forbes.com/reuters/feeds/reuters/2008/03/16/2008-03-17T021331Z_01_N16710089_RTRIDST_0_BEARSTEARNS-JPMORGAN-DEAL-UPDATE-2.html

[Source](https://www.youtube.com/watch?v=gUkbdjetlY8)

中文简报

克莱默力挺流动性数日后，贝尔斯登遭2美元救助暴跌90% 在吉姆·克莱默向投资者保证贝尔斯登安全无虞数日后，摩根大通在联邦支持下以每股2美元的价格对其进行紧急收购，此举实际上将不良资产估值近乎归零，并引发了整个银行业的传染效应。 视频开篇，吉姆·克莱默针对观众彼得对贝尔斯登流动性的担忧作出回应，极力宣称该公司没有陷入困境，撤出资金是愚蠢之举。随后画面猛然切至一段沉重的市场播报，详细报道了周末一场由美联储支持的紧急救助的后续影响——摩根大通仅以每股2美元的价格收购了贝尔斯登。随着贝尔斯登股价开盘暴跌90%，报道详述了不良资产近乎为零的估值如何在金融板块引发普遍的蔓延危机。其他主要金融机构也立即遭受冲击，其中雷曼兄弟重挫近30%，高盛和花旗集团也出现大幅下跌。 吉姆·克莱默在CNBC上断然否认了投资者对贝尔斯登流动性的担忧，坚称该公司状况良好，并建议不要撤出资金。 (0:00) 在美联储周末介入提供支持后，摩根大通同意以每股仅2美元的价格收购贝尔斯登。 (0:20) 贝尔斯登股价开盘暴跌约90%，标志着这家华尔街第五大投资银行遭遇毁灭性崩盘。 (0:20) 这次甩卖式估值实际上将难以估值的证券定价接近为零，从而在同行投资银行中引发了严重的市场传染效应。 (0:20)

Source quotes

[0:00] Jim Cramer: No, no, no! Bear Stearns is fine. Do not take your money out.

Original transcript

[0:00] Okay, Peter writes, "Should I be worried about Bear Stearns in terms of liquidity and get my money out of there?" No, no, no! Bear Stearns is fine. Do not take your money out. If there's one takeaway other than a plus 400, Bear Stearns is not in trouble. I mean, if anything, they're more likely to be taken over. Don't move your money from Bear. That's just being silly. Don't be silly. Okay, just so you get a sense of what's causing the agony by this point, I know you've been talking about it. It's financials led by Bear Stearns after what essentially is a bailout from the Fed. Bear Stearns shares down 90% this morning and it's not just Bear, pretty much every single bank is plunging in early trade this morning. Lehman, which is very similar to Bear in its reliance on fixed income is down nearly 30%. You have big names like Goldman Sachs down 8%, Citigroup down 8%, so it is paying across the board. this morning and as you know it all emanates from Well, the shock this weekend that JP Morgan along with the Fed was going to be bailing out Bear Stearns for $2 a share. This is a stock that recently was trading at $80, last year was trading at $160. It is the fifth biggest bank on Wall Street. It is significant in that it is establishing a price for some of these hard-to-value securities. And as you are well aware, that price is pretty much zero. And that's why you're seeing pain across the street. *Bell rings*