The Tip of the Iceberg: JP Morgan and Bear Stearns (A)

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Exhibit 1 Leading Underwriters of U.S. Mortgage-Backed Securities, 2004-2007 (in $ million)

2007 2006 2005 2004

Rank Bookrunners Proceeds Rank Bookrunners Proceeds Rank Bookrunners Proceeds Rank Bookrunners Proceeds
1 Bear Steams & Co Inc 47,831.4 1 Bear Steams & Co Inc 69,386.7 1 Lehman Brothers 58,789.4 1 Bear Steams & Co Inc 50,783.5
2 Lehman Brothers 46,877.1 2 Lehman Brothers 64,908.1 2 Bear Steams & Co Inc 58,598.3 2 Lehman Brothers 32,519.5
3 Deutsche Bank Securities Corp 36,077.8 3 Greenwich Capital Markets Inc 55,108.0 3 Royal Bank of Scotland 55,454.4 3 BofA Securities 27,594.1
4 WaMu Capital Corp 34,430.5 4 Countrywide Securities Corp 44,948.4 4 Countrywide Securities 38,869.5 4 UBS 26,750.8
5 Credit Suisse 31,144.5 5 Goldman Sachs & Co 44,480.8 5 UBS 34,766.0 5 Royal Bank of Scotland 25,359.4
6 JP Morgan 30,937.2 6 Deutsche Bank Securities Corp 41,738.2 6 CSFB 28,910.6 6 CSFB 24,100.8
7 Goldman Sachs & Co 27,792.2 7 WaMu Capital Corp 40,507.1 7 Goldman Sachs 28,613.1 7 Countrywide Securities 23,384.3
8 Countrywide Securities Corp 27,621.6 8 Credit Suisse 38,352.2 8 BofA Securities 27,572.7 8 Goldman Sachs 21,303.5
9 Greenwich Capital Markets Inc 25,554.8 9 UBS Investment Bank 31,243.8 9 JP Morgan Chase 26,625.0 9 Citigroup 17,963.5
10 Banc of America Securities LLC 24,125.3 10 JP Morgan 30,976.6 10 Washington Mutual 22,196.0 10 Merrill Lynch 15,750.5
11 UBS Investment Bank 20,981.6 11 Banc of America Securities LLC 28,010.7 11 Deutsche Bank 20,827.4 11 Morgan Stanley 14,790.8
12 Citigroup 16,967.7 12 Citigroup 27,385.3 12 Citigroup 19,566.3 12 Washington Mutual 7,172.5
13 Merrill Lynch 15,362.6 13 Morgan Stanley 19,618.1 13 Merrill Lynch 17,083.3 13 Deutsche Bank 3,950.5
14 Morgan Stanley 11,329.8 14 Merrill Lynch 15,742.4 14 Morgan Stanley 13,465.8 14 JP Morgan 2,811.1
15 HSBC Securities Inc 9,411.2 15 Barclays Capital 14,728.3 15 Barclays Capital 5,177.5 15 Nomura 1,130.0
All others 51,695.4 All others 24,187.1 All others 19,783.9 All others 11,568.7
Total 458,140.7 Total 591,321.8 Total 476,299.2 Total 306,933.5

Source: Thomson Financial (SDC database), accessed November 2008.

Exhibit 2 Bear, Stearns & Co., Balance Sheet Data, as amended, 2004-2007, and unaudited Q1 2008 (in $ million)

Ql 2008
(FY ending November 30) (unaudited) 2007 2006 2005 2004
Assets
Cash and equivalents $20,786 21,406 4,595 5,859 4,173
Cash and securities deposited with clearing organizations or segregated in
compliance with federal regulations 14,910 12,890 8,804 5,270 4,423
Securities received as collateral 15,371 15,599 19,648 12,426 8,823
Collateralized agreements:
Securities purchased under agreements to resell 26,888 27,878 38,838 42,648 45,395
Securities borrowed 87,143 82,245 80,523 62,915 69,793
Receivables:
Customers 41,990 41,115 29,482 33,255 32,114
Brokers, dealers and others 10,854 11,622 6,119 3,545 2,934
Interest and dividends 488 785 745 433 316
Financial instruments owned, at fair value 118,201 122,518 109,200 93,364 41,490
Financial instruments owned and pledged as collateral, at fair value 22,903 15,724 15,968 12,880 36,907
Total financial instruments owned, at fair value 141,104 138,242 125,168 106,244 78,397

Assets of variable interest entities and mortgage loan special purpose entities 29,991 33,553 30,245 15,152 4,837

Property, equipment, and leasehold improvements, net of accumulated 608 605 480 451 381
depreciation and amortization
Other assets 8,862 9,422 5,786 4,437 4,362
Total Assets $398,995 395,362 350,433 292,635 255,950
Liabilities and Stockholders' Equity
Unsecured short term borrowings $8,538 11,643 25,787 20,016 12,211
Obligation to return securities received as collateral 15,371 15,599 19,648 12,426 8,823
Collateralized financings:
Securities sold under agreements to repurchase 98,272 102,373 69,750 66,132 58,604
Securities loaned 4,874 3,935 11,451 10,104 10,719
Other secured borrowings 7,778 12,361 3,275 0 0
Payables:
Customers 91,632 83,204 72,989 73,231 79,384
Brokers, dealers and others 5,642 4,101 3,397 2,657 2,345
Interest and dividends 853 1,301 1,123 797 569
Financial instruments sold, but not yet purchased, at fair value 51,544 43,807 42,257 35,004 29,476
Liabilities of variable interest entities and mortgage loan special purpose 26,739 30,605 29,080 14,321 4,762
entities
Accrued employee compensation and benefits 360 1,651 2,895 1,853 1,678
Other liabilities and accrued expenses 3,743 4,451 2,082 1,812 1,546
Long-term borrowings 71,753 68,538 54,570 43,490 36,843
Total Liabilities $387,099 383,569 338,304 238,354 210,116

Commitments and contingencies

Stockholders' Equity
Preferred stock 352 352 359 372 448
Common stock, $1 par value; 500,000,000 shares authorized as of
November 30, 2007 and 2006; 184,805,847 shares issued as of
November 30, 2007 and 2006 185 185 185 185 185
Paid-in capital 5,619 4,986 4,579 4,109 3,548
Retained earnings 9,419 9,441 9,385 7,493 6,177
Employee stock compensation plans 2,164 2,478 2,066 2,600 2,667
Accumulated and other comprehensive (loss) income 25 -8 0 0 0
Shares held in RSU trust -2,955 0 0 0 0
Treasury stock, at cost:
Common stock: 71,807,227 and 67,396,876 shares as of
November 30, 2007 and 2006, respectively -2,913 -5,641 -4,445 -3,824 -3,876
Total Stockholders' Equity 11,896 11,793 12,129 10,791 8,991
Total Liabilities and Stockholders' Equity 398,995 395,362 350,433 292,635 255,950

Source: Bear Stearns & Co, 10-K and 10-Q reports, various years.
Exhibit 3 Bear, Stearns & Co., Commitments, Contingencies, and Guarantees, 2008–2012 (in $ million)

Commitments and Contingencies

(FY ending November 30) Total 2008 2009 2010 2011 2012 Thereafter
Commitments through Bear Energy 4,319 81 82 83 258 416 3,399
Leases 1,250 125 122 122 133 98 650
Lending-related commitments, of which
to investment grade borrowers* 3,420
to noninvestment grade borrowers* 3,300
Other contingent lending commitments to noninvestment grade companies 501
Commitments related to private equity-related investments and partnerships 729
In connection with underwriting 652
Commitments to purchase or finance commercial and residential mortgage loans 2,830
Letters of credit, of which
Secured 1,330
Unsecured 1,420
Commitments to purchase credit card and personal bankruptcy receivables 170
Total 5,569 14,558

Guarantees

(Expiring during FY ending November 30) Total 2008 2009-2010 2011-2012 Thereafter
Derivative contracts (notional value) 2,515,965 495,124 472,384 742,138 806,319
Related to trusts consisting of municipal securities 3,872 3,370 502 0 0
Related to operating lease arrangement for headquarters building 570 0 0 570 0
Total 2,520,407 498,494

Source: Bear, Stearns & Co., 2007 Form 10-K, pp. 118-121.
*Note: $952 million of credit risk for investment grade loan commitments and $220 million of credit risk for noninvestment grade loan commitments was offset by hedges.
Exhibit 4 Bear Stearns & Co., Income Sheet Data, as amended, 2004-2007, and unaudited Q1 2008 (in $ million,
except EPS and ratios)

Ql 2008 2007 2006 2005 2004

(FY ending November 30) (unaudited)
Revenues 3,427 16,151 16,551 11,552 8,422
Capital Markets 1,036 3,919 7,322 5,641 5,305
Institutional equities 811 2,158 1,962 1,446 1,088
Fixed income 66 685 4,190 3,293 3,147
Investment Banking 159 1,076 1,170 983 1,070
Global Clearing Services 253 1,200 1,077 1,029 894
Wealth Management 200 830 858 681 628
Private client services 161 602 522 453 442
Asset management 39 228 335 228 187
Interest Expense 1,948 10,206 7,324 4,141 1,609
Net Revenues 1,479 5,945 9,227 7,411 6,813
Non-interest Expenses
Employee Compensation and Benefits 754 3,425 4,343 3,553 3,254
Floor brokerage, exchange, and clearance fees 79 279 227 222 231
Communications technology 154 578 479 402 369
Occupancy 73 264 198 168 142
Advertising and market development 40 179 147 127 114
Professional fees 100 362 280 229 197
Impairment of goodwill and specialist rights 0 227 0 0 0
Other 126 438 406 503 484
Total 1,326 5,752 6,080 5,204 4,791
Net Pretax Income, of which 153 193 3,147 2,207 2,022
Capital Markets 171 -232 2,801 2,020 1,915
Global Clearing Services 86 566 465 472 350
Wealth Management -42 -45 69 37 67
Other -62 -96 -188 -322 -305
(Benefit from)/Provision for income taxes 38 (40) 1,093 745 677
Net Income 115 233 2,054 1,462 1,345
Preferred stock dividends -5 -21 -21 -24 -28
Net income applicable to common shares 110 212 2,033 1,438 1,317
Basic earnings per share ($) $0.89 $1.68 $15.79 $11.42 $10.88
Diluted earnings per share ($) $0.86 $1.52 $14.27 $10.31 $9.76
Weighted avg. common shares outstanding, basic 129 130 132 130 127
Weighted avg. common shares outstanding, diluted 139 146 149 147 145
Return on Average Common Equity (%) 0.97% 1.80% 19.10% 16.50% 19.10%

Source: Bear Stearns & Co, 10-K and 10-Q reports, various years.
Exhibit 5 Selected Money Market Funds Assets and Repurchase Agreements with Bear Stearns (in $ million)

Repurchase
Agreements Term of Bear Steams
Repurchase with Bear Collateral for Bear Steams Repurchase
Date Assets Agreements Steams Repurchase Agreement Agreement
Fidelity Cash Reserves 11/30/2007 110,363 29,323 370 Mortgage Loan Obligations valued 3-Month
at $389 million
Vanguard Prime Money Market Fund 02/29/2008 109,248 3,419 -
JPMorgan Prime Money Market Fund 08/31/2008 104,379 15,220 -
Goldman Sachs money market funds* 12/31/2007 99,705 29,105 1,000 U.S. Government securities worth Overnight
$1,000 million

Schwab Value Advantage Money Fund 12/31/2007 59,684 3,960 1,690 U.S. Government securities worth Overnight
$1,724 million
Schwab Cash Reserves 12/31/2007 26,162 2,329 515 U.S. Government securities worth Overnight
$525 million
Schwab Advisor Cash Reserves 12/31/2007 21,439 1,673 765 U.S. Government securities worth Overnight
$780 million
The Reserve Fund Primary Fund 11/30/2007 38,787 2,950 1,450 ABS and CMOs worth $1,522.4 Overnight
million
The Reserve Fund Primary II Fund 11/30/2007 23,500 4,091 1,200 ABS, CMOs, and Freddie Mac Overnight
securities worth $1,254.9 million

Dreyfus Cash Management Fund 01/31/2008 23,225 3,733 300 Corporate bonds worth $308 million Overnight

Dreyfus Institutional Preferred

Money Market Fund 09/30/2007 10,418 820 200 Corporate bonds worth $206 million Overnight

Source: Casewriter compilation from fund SEC filings.

* Note: Joint repurchase agreement account I is shared across four funds: Prime Obligations, Money Market, Treasury Obligations, and Government. Joint repurchase agreement account II is shared
across the Prime, Money Market, and Government Funds.
Exhibit 6 Detail of Goldman Sachs Money Market Funds Repurchase Agreements*, December 31, 2007

Joint repurchase agreement account I (secured by US Treasury securities)

Counterparty Principal Amount Interest Rate Maturity Date
ABN Amro, Inc. 1,000 1.50% 1/2/2008
Banc of America Securities LLC 300 1.00% 1/2/2008
Barclays Capital PLC 500 1.75% 1/2/2008
Bear Steams & Co., Inc 1,000 2.00% 1/2/2008
Deutsche Bank Securities, Inc 1,650 1.50% 1/2/2008
Greenwich Capital Markets 1,000 1.50% 1/2/2008
JPMorgan Securities, Inc. 1,500 1.50% 1/2/2008
Lehman Brothers Holdings, Inc. 250 0.75% 1/2/2008
Lehman Brothers Holdings, Inc. 1,000 1.25% 1/2/2008
Merrill Lynch &Co., Inc. 500 1.00% 1/2/2008
Total principal amount 8,700

Joint repurchase agreement account II (secured by US Agency securities)

ABN Amro, Inc. 4,000 4.85% 1/2/2008
Banc of America Securities LLC 2,000 4.50% 1/2/2008
Barclays Capital PLC 2,700 4.65% 1/2/2008
Citigroup Global Markets, Inc. 2,500 5.00% 1/2/2008
Deutsche Bank Securities, Inc 6,550 4.75% 1/2/2008
Greenwich Capital Markets 1,000 4.75% 1/2/2008
Merrill Lynch &Co., Inc. 750 4.50% 1/2/2008
UBS Securities LLC 905 4.65% 1/2/2008
Total principal amount 20,405
Total size of money market funds 99,750

Source: Goldman Sachs Trust, Form N-CSR, March 7, 2008, pp. 50-51, available at
www.sec.gov/Archives/edgar/data/822977/000095012308002689/y46663nvcsr.htm, accessed December 5, 2008.

* Note: Joint repurchase agreement account I is shared across four funds: Prime Obligations, Money Market, Treasury Obligations,
and Government. Joint repurchase agreement account II is shared across the Prime, Money Market, and Government Funds.
Exhibit 7 Liquidity Positions of Leading U.S. Investment Banks, November 30, 2007

(in $ billion) Bear Steams Goldman Sachs Lehman Brothers Merrill Lynch Morgan Stanley
Total Liquidity (defined as cash +liquid assets + 35.3 168.6 169.8 181.9 118.0
unencumbered asset borrowing value)
Total Assets 395.4 1,119.80 691.1 1,020.1 1,045.4
Total Liquidity as Percentage of Total Assets 9% 15% 25% 18% 11%
Short-term Unsecured Debt 20.6 71.6 21.5 73.3 65.3
Liquidity Ratio (defined as Total Liquidity / Short-term 171% 236% 790% 248% 181%
Unsecured Debt)
Repo Financing 102.4 159.2 181.7 235.7 162.8
Repo Lending 27.9 85.7 162.6 221.6 126.9
Net Repo Financing 74.5 73.5 19.1 14.1 36.0
Total Liquidity as Percentage of Repo Financing 34% 106% 93% 77% 72%
Total Liquidity as Percentage of Net Repo Financing 47% 230% 889% 1289% 328%

Source: Adapted from James Mitchell and John Grassano, “Securities Brokers: Evaluating Liquidity at the Rest of the Brokers in a ‘Run on the Bank’ Scenario,” The Buckingham Research Group,
March 17, 2008, p. 2.
Exhibit 9 JP Morgan Chase & Co., Selected Financial Data (as amended), 2004–2007 (in $ million, except
EPS and ratios)

Q1 2008 2007 2006 2005 2004

Revenue, net 16,890 71,372 61,999 54,248 42,736
Income from Continuing Operations - 15,365 13,649 8,254 4,260
Net pretax income from continuing operations 3,535 22,808 19,886 11,839 5,856
Net income 2,373 15,365 14,444 8,483 4,466
Operating earnings by line of business
Investment Bank -87 3,139 3,674 3,673 2,948
Retail Financial Services -227 3,035 3,213 3,427 2,199
Card Services 609 2,919 3,206 1,907 1,274
Commercial Banking 292 1,134 1,010 951 608
Treasury and Securities Services 403 1,397 1,090 863 440
Asset Management 356 1,966 1,409 1,216 681
Corporate 15 1,775 842 -3,554 61
Total Assets 1,642,862 1,562,147 1,351,520 1,198,942 1,157,248
Total Deposits 761,626 740,728 638,788 554,991 521,456
Long-term Debt 189,995 183,862 133,421 108,357 95,422
Total Liabilities 1,517,235 1,438,926 1,235,730 1,091,731 1,051,595
Stockholders' Equity 125,627 123,221 115,790 107,211 105,653
Tier 1 Capital $89,600 86,746 81,055 72,474 68,621
Tier 2 Capital - 43,496 34,210 29,963 28,186
Tier 1 Capital Ratio 8.3% 8.4% 8.7% 8.5% 8.7%
Total Capital Ratio 12.5% 12.6% 12.3% 12.0% 12.2%
Gross Leverage Ratio 12.7% 12.7% 11.7% 11.2% 10.9%
Allowance for loan losses (to total loans) 2.29% 1.78% 1.51% 1.69% 1.82%
Return on Equity 8% 13% 13% 8% 6%
Earnings per share, diluted $0.68 $4.38 $4.04 $2.38 $1.55

Source: JP Morgan Chase & Co., 10-K and 10-Q reports, various years.
Exhibit 10 Comparative Data on Leading Commercial and Investment Banks, 2007 (in $ billion)

Commercial Banks Investment Banks

Bank of Goldman Lehman Morgan Merrill
JPMC Citigroup UBS America Bear Sachs Brothers Stanley Lynch
Assets (A) 1,562 2,187 2,273 1,716 395 1,120 691 1,045 1,020
Shareholders'
Equity (B) 123 114 43 147 12 43 22 32 32
Leverage ratio
(A/B) 12.7 19.2 52.8 11.7 33.2 26.2 30.7 32.6 31.9
Market Cap 147 147 109 183 15 105 32 53 50

Source: Compiled from company reports.

Note: Commercial bank data for year-end 2007, UBS data in CHF billion; investment bank data for FY ending Nov 30, 2007.
Exhibit 15 Sanford Bernstein Estimates of Bear Stearns Break Up Value (in $ billion)

Business Value Argument

Prime Brokerage 3.0 1x book value of $3 billion 15% of $1.9 billion in assets under
management + $1 billion in
Merchant Banking 1.3 investments
Asset Management 1.3 3x 2007 revenues of $428 million, based on comparable firms
High Net Worth Brokerage 1.0 2.8x 2007 revenues of $361 million, based on recent
transactions Estimate of $180 million revenue each year, 30%
pretax margin,
Mortgage Servicing 0.6 18x multiple
Energy Assets 0.5 Not given
Total 7.7
Market Value (3/14/08) 4.1
Book Value 11.8

Source: Adapted from Brad Hintz, “Bear Stearns: Sale Price $240 Million, Break-Up Value of ‘Good’ Businesses Calculated at $7.7
Billion,” Sanford Bernstein Research, March 17, 2008, p. 5.