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JP Morgan bought Bear Stearns for $230 something million, about 7% of its closing price Friday, and about 2% of what it was trading for 2 weeks ago. On top of it, this was an all stock deal with the government funding more tha 100% of it (the Fed will be financing $30 billion of non-liquid BSC securities, the back stop that I said would happen).

 To put this into perspective (I'm a NYer, so I am quite familiar with the landscape), the BSC headquarters is worth at LEAST $1 to $2 billion. Between the clearing infrastructure, asset management, structured product assets and real estate, there is at least a $1.5 billion immediate gain here. How much that will be offset by litigation risk is an unknown. The CEO got up on CNBC and clearly told the world that BSC had no problems. Lawyers must be getting a boners in real time.

I will admit to a big mistake that I made. I hedged my gains at $35 Friday to lock in the profts. Those calls are literally worthless now. I shouldn't be complaining since my gains as of this post are averaging over 800% on this trade, it was the largest position in my portfolio, and that was after taking profits last week. Just thought I would be honest and let everyone know that I am far from perfect, thus as I have said so often, no one should be taking anything I say as investment advice. 

Now, as for Monday's trading.... I am not a trader, and I believe in medium to long term investment horizons, but there is a LOT of opportunity to be had here. Lehman is probably going to get a drubbing. Morgan Stanley is being overlooked by the Street. Citibank will get no love. I already covered on WaMu, with all of the opportunities abound, I don't believe that I should be trying to dabble below $10 when I have ridden shares down from last year in the $30's.

I fear Goldman will be seeing a lot of devaluation. Don't forget the companies that we have covered earlier in the blog. There financing is damn near gone. GGP, the builders, etc.

The Fed is working hard to help the country. That is undeniable. They have cut rates, extended financing directly to non-banks, cut more rates - but, and as I thought, the markets are ignoring these actions and driving financials down and  commodities up.

Lehmans asset make up will make it a target in US trading. I will probably attempt to expand my position and will be willing to pay premiums. My small position is quite profitable already. I will attempt to expand the financials on my list in aggregate, and MS (who is my 2nd largest position in the financials) will be expanded as well.