Stocks were lower in early trading Monday as Wall Street digested the fire-sale buyout of an investment banking giant: Bear Stearns.
CNBC brought in the market pros for their perspective on the fallout.
Crescendo of a Crisis
“We’re getting to the crescendo of this financial crisis. We will find out in the next four or five days whether the moves being taken by the Fed will hold the financial system in place. If it does, as I expect, then liquidity will come back into the markets.”
- Richard Bove, Punk, Ziegel & Co. financial strategist
“People do not make money in panics. They make money by stepping back— letting this play out. And I think this is the opportunity, if people have cash, to be looking to buy things that may get mis-priced by short-term issues here.”
- Richard Steinberg, Steinberg Global Asset Management
“I think you’re going to continue seeing bloodletting this week. When you’ve got a stock that traded at $150 less than six months ago trading at $2 share, you have got to call into question the valuation of all the other pure organizations.”
- Mark Arian, Towers Perrin
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Fear on the Street
"There’s just this tremendous fear out there of mis-marking of assets on balance sheets and how could JP Morgan have gotten away with paying so little for Bear Stearns and why did the Fed have to step of $30 billion for take on some of the bad assets. I think there are a lot of questions out here and we’re in need of some answers.”
- Anton Schutz, Burnham Asset Management
Deal with Crises
“The discount window is the way to deal with crises, and opening the discount window to investment banks is a historic thing. Even if Bear [Stearns] hadn’t happened yesterday, you’d have a really big story this morning just based one what the Fed’s done with its lending facilities.”
- Robert McTeer, former Federal Reserve Bank of Dallas president