The run on Sterns wiped out their cash position, so all that Sterns is right now is a small services company, a plumb but small piece of prime NY real estate , and several billions of dollars invested in mortgaged backed securities, derivatives and other 'paper'. Oh, and a huge amount of debt.

So now JP has taken on the obligation of that debt, and assumes ownership of that paper that may very well collapse and be virtually worthless.

JP had one weekend to call in the basement boys, lawyers and accountants to deliver the deal. They have no idea what they just bought. They'll find out over the next week as they go over the paper. The may have hit the jackpot, or they may have just tied themselves to a sinking weight.

Yeti