"History is a wonderful thing, if only it was true"
-Tolstoy

Saturday, March 15, 2008

Whoopsie

Likely will be gone by this time next week



Fed Races to Rescue Bear Stearns In Bid to Steady Financial System - WSJ.com:

"Bear, although not one of the giants of Wall Street, long had a reputation as one of the most astute risk managers. It has a large mortgage business, but its mix of other businesses is less diverse than those of investment-banking rivals. That profile hurt Bear when the subprime-mortgage problems developed last spring. Two of Bear's mortgage-related hedge funds collapsed in July, costing investors more than $1 billion and worsening the credit crunch then developing. Longtime CEO James Cayne, who was seen by some investors as too hands-off when the mortgage mess unfolded, stepped down in January, though he remained chairman. His successor, Mr. Schwartz, has been trying to rally Bear. But another downturn in the credit markets in the past couple of weeks fed nagging fears that Bear wasn't financially strong enough. Word began to spread among fixed-income traders nine days ago that European banks had stopped trading with Bear. Some U.S. fixed-income and stock traders began doing the same on Monday, pulling their cash from Bear for fear it could get locked up if there was a bankruptcy. That development put firms that still wanted to do business with Bear in a tough position: If Bear did fail, they would have to explain to their clients why they ignored the rumors. On Tuesday, a major asset-management company stopped trading with Bear."

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