The Federal Reserve has stepped in to take over troubled Bear Stearns, and the Dow futures have sunk to a new low below March 10, but have still yet to reach the lows reached on January 22nd. Bear Stearns is being sold by the Fed to JP Morgan Chase for only $2/share. What a stunning development, given that Bear Stearns isn't even a member of the Federal Reserve system.This entire development has created a sense of uncertainty that has dropped the Dow Index futures by as much as 250+ points. However, the Dow has recovered from deeper dips than this before, so anything could happen in the day session.
The typical "flight-to-safety" phenomenon of buying treasuries is also evident this morning. This is also remarkable given the extremely poor return (lower than inflation) of treasuries. Gold also has now sunk well off its overnight record high of $1033/ounce to close to its Friday futures settlement price.
