March 17, 2008
|Research firm CreditSights actually used the term "New World Order" in a report describing banking industry consolidation.|
NEW YORK (Reuters) – Financial firms face a “new world order” after a weekend fire sale of Bear Stearns and the Federal Reserve’s first emergency weekend meeting since 1979, research firm CreditSights said in a report on Monday.
More industry consolidation and acquisitions may follow after JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) on Sunday said it was buying Bear Stearns (BSC.N: Quote, Profile, Research) for $236 million, or deep discount of $2 a share, a fraction of the $30 price on Friday and record share price of about $172 last year.
“Last evening the Bear Stearns situation reached a crescendo, as JPMorgan agreed to acquire the wounded broker for a token amount of $2 per share,” CreditSights said. “The reality check is that there are many challenged major banks, brokers, thrifts, finance/mortgage companies, and only a handful of bonafide strong U.S. banks.
CreditSights said it lowered its broker, bank and finance company recommendations to “market weight” due to the credit crisis and stresses in the market.
In the event of future consolidation, potential acquirers identified by CreditSights include JPMorganChase, Wells Fargo, US Bancorp, Goldman Sachs and Bank of America (BAC.N: Quote, Profile, Research), once it works through its recent agreement to acquire Countrywide Financial Corp., (CFC.N: Quote, Profile, Research) the largest U.S. mortgage lender.
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