Everything’s coming up roses

Existing home sales were up 3% versus expectations of a 1% decline for the month of February. Prices fell more than expected to $195,900 from $201,100 in the prior month. Overall, this is a slight dollar increase in sales month over month. Naturally, depressed home builders are flying today.

JP Morgan raised their $2 bid to $10 for Bear Stearns. JP Morgan management is planning to buy the Bear Stearns employee vote by promising existing Bear employees their 2007 compensation plus 25-35% of their 2006 compensation if they stay on until the deal closes. In meetings with JP Morgan management, Bear employees were told they would be evaluated equally with the JP Morgan analysts. JP Morgan analysts were told they would get preferential placement post-deal. I would hope that the Bear Stearns analysts are actually the ones being told the truth as analysts should be evaluated on their abilities and not on their political positions but I may be naïve.

The Fed, in their continuing effort to blur the lines between central bank and brokerage account, have begun to set up an LLC to hold the securities that Blackrock will be managing on their behalf. Expect an IPO of Federal Reserve, LP around Q4. I can't wait to read the offering document.