Anti-gold cabal gets desperate

Section:

9p EDT Tuesday, September 12, 2000

Dear Friend of GATA and Gold:

One big gold shorter, Deutsche Bank, having bid for
another big gold shorter, J.P. Morgan, who else would
be the latest suitor for Morgan but ... the third
biggest gold shorter, Chase Manhattan?

That was the news today, and a Reuters story about it
is attached. This seems like a lot more than mere
coincidence. Gold's enemies are all collecting in one
place. They may be easier to deal with that way.

Thanks to Stephen Chapman for his new commentary at
Gold-Eagle, which examines the sudden attention for
GATA in Europe. You can read it here:

http://www.gold-eagle.com/gold_digest_00/chapman091300pv.html

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Chase in talks to buy J.P. Morgan

By Mary Kelleher

NEW YORK, Sept 12 (Reuters) -- Chase Manhattan Corp. the
No. 3 U.S. bank holding company, is in serious talks to
buy leading commercial and investment bank J.P. Morgan
& Co. Inc. to fortify its securities businesses in a
rapidly consolidating industry, a source close to the
deal said on Tuesday.

A deal, which analysts have estimated could be worth as
much $35 billion, or $210 to $220 per J.P. Morgan
share, would rank as one of the largest in the U.S.
financial services industry and create a global banking
powerhouse. It could be announced as soon as Tuesday
night or early Wednesday morning. The source said the
boards were meeting now.

Chase and J.P. Morgan spokesman declined to comment.

Employees leaving J.P. Morgan's headquarters on 60 Wall
Street told Reuters they were told to expect an
announcement about a merger late Tuesday or on
Wednesday morning. Senior executives told one support
staffer Chase was the buyer.

The New York Times first reported the story on its Web
site. Exact details of the deal were not yet available.

"The rumor is $210 a (J.P. Morgan) share," Steven
Eisman, an analyst at CIBC World Markets, said.

The possible acquisition would propel Chase toward its
long-stated aim of joining the top Wall Street
investment banks like Merrill Lynch and Co. Inc. and
Goldman Sachs Group Inc. and follows a spate of
industry mergers.

J.P. Morgan, for its part, has been under pressure to
do a deal because it risks being left behind as the
world's biggest banks merge with each other to form a
shrinking number of global financial players.

J.P. Morgan -- whose founder played a pivotal role in
saving the U.S. government from financial panic in the
early 1900s -- has not done a major deal since it
merged with Guaranty Trust Co. of New York in 1959. It
has stood by as a string of European banks quickly
snapped up its U.S. rivals.

"We're going to get money out of them either way," a
tech consultant who works for J.P. Morgan, said of a
prospective buyer. "I'm not worried."

But the deal might also mean large job cuts and still
might not make Chase large enough in several key
securities businesses where it is eager to expand, such
as helping companies with new stock offerings, Lawrence
Cohn, an analyst at Ryan, Beck & Co., said.

"I have a hard time following the logic behind this
deal," Cohn said. "There is a huge amount of redundancy
between the two companies, which means when they
combine they are unlikely to hold on to their revenues.
One business where I think that will be especially
clear is in the derivatives business -- they are the
two largest derivatives dealers in the world."

The combined company would rank 7th among firms engaged
in the lucrative business of advising U.S. companies on
merger deals, ranking behind Wasserstein Perella Group
and Goldman, as well CS First Boston and DLJ, based on
data from Thomson Financial Securities Data.

In terms of new U.S. stock offering deals, based on
data so far this year, the merged bank also would still
badly lag rivals like Goldman, Merrill Lynch and Co.
Inc. and Morgan Stanley Dean Witter & Co.

Chase's stock fell $1-7/16 to close at $56-1/16 while
shares of J.P. Morgan, one of the 30 companies making
up the benchmark Dow Jones Industrial average, rose $8-
3/4 to close at $177-3/4. Earlier on Tuesday, they hit
a record high of $180 on the New York Stock Exchange.
In after-hours trading on the Instinet electronic
trading system, J.P. Morgan's stock shot up to $184-7/8
while Chase's fell to $52-1/4.

J.P. Morgan, the nation's fifth biggest bank holding
company with some $266 billion in assets, has been a
long-rumoured takeover target for its lucrative money
management unit, world famous brand name, long list of
corporate customers, and global reach. Its name was
also tied to Germany's Deutsche Bank in the rumour
mill.

J.P. Morgan Chief Executive Douglas Warner cancelled an
appearance at a Merrill Lynch conference on Tuesday,
further fuelling incessant takeover speculation around
the bank. Its chief financial officer, Peter Hancock,
also quit last week.

The talks follows a blitz of mergers in the financial
industry which many say have put the heat on the
remaining Wall Street firms to strike a deal to
compete.

Switzerland's UBS AG recently announced plans to buy
Wall Street brokerage PaineWebber Group Inc. and Credit
Suisse Group Inc. snapped up Donaldson Lufkin &
Jenrette, another rival.

Chase has made no secret of its desire to expand its
business of advising companies on mergers and helping
with new stock and bond offering deals.

In the last two years, Chase bought West Coast
investment bank Hambrecht & Quist, British money
manager and investment bank Robert Fleming Holdings and
investment banking boutique Beacon Group to build up
its mergers and acquisition advisory business and
corporate finance arm.