If this event is taken by the market for what is – a complete failure by US regulators, and continued plummeting of all things housing – this has to be bad for them.
Bear Sterns went back up a little following the JPM buyout, but this is a takeover.
I’d expect a 20%+ drop. Then again it wouldn’t be the weirdest thing if Hanky and Bernanky offered a premium over the current share prices.
I’m also curious what this will do to the international credibility of the US and the dollar, and what H&B will do with all their newly acquired REOs.