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Bear Stearn

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March 14, 2008 – Comments (7)

The "rescue" of Bear Stearn is the type of thing that I've been expecting and, as I have stated a few times, is why I choose to be out of the market.  If you check out the brokerage insurance quality it might leave something (like actual capital) to be desired.

I doubt this will be the last "event" in this mess. 

7 Comments – Post Your Own

#1) On March 14, 2008 at 10:50 PM, SpaceMonkey01 (31.02) wrote:

Ya know, this is exactly the kind of thing that shakes investor confidence to the core. Not as much because of the implication for the financial system of their potential failure, but because they lied. A few days ago Bear Stearns came out and said they were "fine"-- clearly not the case. Bear Stearns said their liquidity problems all developed in the last 24 hrs. Shenanigans. It may have come to a head in the past 24 hrs but they should have seen this coming. I am going to assume both the Fed and Bear Steans knew that they were not fine when Bear Stearns made this statement as imagine it took more than a couple days to put this rescue deal in place.

This will destroy any last vestiage of credibility the fed and the Financials had. I think it would have been better off if  Bear Stearns took its licks earlier on and were a bit more honest about the depth of their problems.

How can view any statements about these bubbas being "fine" from here on out? Or the Fed saying the economy will recover quickly?

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#2) On March 14, 2008 at 10:51 PM, dwot (45.74) wrote:

Housing default info over on CR.  Toll Brothers, KB Homes and Lennar...

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#3) On March 14, 2008 at 11:34 PM, LordZ wrote:

It was when other brokers refused to enter into transactions with Bears that they were dead in the water and shark bait ~ bleeding ~ waiting to be devoured.   It is all rumours but the rumor was that Bears was slow in settling accounts with other brokers that no one else was willing to trade with them or enter in the opposite position in a derrivative transaction.

Its pretty messed up when someone who simply should make its money on volume of trades ~ ends up going under ~ obviously they were too aggressive and failed to secure adequate funding and capital...

But investors be happy, this is the first sign of a possible recovery coming, what needs to happen next is the failure of a top bank ...... and then we mAY BE  one step closer to bottoming and possibly starting to recover.

 

damn Dwot the Bears thing is a huge money making opportunity It just so sucked that I was unable to take advantage as my account didnt have margin transactions and they didnt allow me to short !!!!!!!!!!!!!!!!!!!!!!!!

otherwise on 100 shares I would have made 2,000 dollars !!!!!!

In one day :)

 

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#4) On March 15, 2008 at 12:21 AM, AnomaLee (28.76) wrote:

I'll believe Bear Sterns had no idea about liquidity issues until yesterday as much as I believe in Santa Clause and the Easter Bunny.

How can analyst outside the company know more about operations than insiders at the top? No, investment bank or regular bank has enough capital to cover this type of situation. I think Washington Mutual could still face a similar problem. 

Are we going to keep bailing out these companies with tax dollars?

Also, dwot I was looking to purchase some corporate bonds. and according to my screen it said WaMu and Countrywide are both BBB. CountryWide bonds yielding 22% YTM...

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#5) On March 15, 2008 at 2:33 AM, AnomaLee (28.76) wrote:

I was wondering if you thought that was a good deal? LOL...

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#6) On March 15, 2008 at 7:42 PM, GS751 (27.56) wrote:

I cannot say I am made about the Bear Stearns situation :)  I had a nice position.

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#7) On March 16, 2008 at 10:25 AM, dwot (45.74) wrote:

Monday is looking to be a bad day...  We'll see.  I've just glanced at news, but Lehman is apparently also close to this kind of trouble...

 

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