Bear Stearns fails, but market tries to recover

Bear Stearns failure (forget it's symbol) shocked global markets. Overseas markets had an enormous sell-off, 3-5% declines were common. Dow opened down 200, but is off the lows at minus 151, decliners over advancers 6-1 & NAZ down 58. The S&P 500 is hovering around the sensitive point of 1270. It's believed that a close below that number can bring heavy computer selling.

Bear Stearns collapse in just a couple of days stunned the world's markets. JP Morgan (JPM), taking the news well - up 3.57, is buying Bear Stearns for $2+ a share. Bear Stearns is trading double that, hoping for the best. The FED is providing help, always tricky when some believe less government interference is the correct course of action. The FED, in a rare weekend move, in an attempt to calm the markets on Sun, agreed to become a lender of last resort to Wall Street investment houses. They will be able to secure short-term emergency loans starting today. It also approved a cut in its emergency lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately. Pres Bush praised the FED's moves adding emphasis to government's concern about the financial mess we are in. Meanwhile, Lehman (LEH), another major investment house, is down 8 as shorts are betting against them.

These are very troubled times. Very smart investors should use this time to study changing events & companies with excellent values. The credit crisis, crunch, whatever, is bringing excellent buying opportunities for stocks that are becoming undervalued. Homework always sounds dull, but it can pay off handsomely in troubled times.