How the mighty Bear Stearns has fallen to a $2 exacta

JPMorgan is buying Bear Stearns for just that price — $2 a share. What’s next? Major job cuts, is my guess. No help for people with shaky home loans connected to Bear.

The pending Bear collapse, with its financial rating threatening to be devalued to junk-bond status Monday, had everybody in a panic:

The Federal Reserve and the U.S. government swiftly approved the all-stock buyout, showing the urgency of completing the deal before world markets opened.

And the Fed continued to stand behind its indirect bailout:

The Fed also essentially made the takeover risk-free by saying it would guarantee up to $30 billion of the troubled mortgage and other assets that got the nation’s fifth-largest investment bank into trouble.

JPMorgan Chief Financial Officer Michael Cavanaugh gave no indication what would happen to Bear’s 14,000 employees.

I can tell you. If JPMorgan wants to make some immediate turnaround money, and the credit market is so slow, it will probably whack as many as half of those employees.

Cavanaugh did say that Morgan was most interested in Bear’s prime investment business, which does deals with major players like hedge funds.

In other words, if you hold a home mortgage connected to Bear, and you’re feeling kind of shaky yourself, don’t expect much customer service from Morgan.