The US Fed decided to fight fire with fire. To solve the debt problem, they added debt! The genius of this plan was, we admit, not immediately obvious..September 25th, 2013 | Bill Bonner+ | 0 comments | Continued
All Posts Tagged With: "Bear Stearns"
The S&P 500 hit a 14-month high overnight. The conventional wisdom is that two news events are responsible. This is probably wrong. But let’s look at both events anyway and see what happened.
The first is that Abu Dhabi extended a $10 billion in financing to debt-distressed Dubai. Hossanah! Remember, Dubai is not Lehman. It’s Bear Stearns.December 15th, 2009 | Dan Denning+ | 5 comments | Continued
But first things first. Dubai World is not nearly large, leveraged, or systemically important as either Bear Stearns or Lehman Brothers when both those firms failed. For those reasons, it’s unlikely that the failure of Dubai World (and we’re not saying it will fail) would, by itself, cause a global deleveraging.November 30th, 2009 | Dan Denning+ | 18 comments | Continued
Why aren’t the banks lending locally and what are they doing instead? Well, they’re probably terrified that commodity prices won’t recover any time soon, rendering the collateral posted by mining companies worth a lot less. Or, worried about future losses in commercial property, the banks are saving up for a rainy day.March 31st, 2009 | Dan Denning+ | 19 comments | Continued
Last Wednesday, a bunch of peeved mortgagees protesting government favoritism in the Bear Stearns case entered the lobby of the company’s (soon-to-be-former) headquarters building in midtown Manhattan. While it might not seem like much, I view the symbolic “penetration” of this corporate stronghold as the very first sign of a much broader citizen revolt against the extraordinary protections being shown to crapped-out investment banker boyz…April 10th, 2008 | James Howard Kunstler+ | 7 comments | Continued
The background for this latest crisis is what we’ve been reckoning within these Daily Reckonings for so many months. The geniuses at Bear Stearns had their calculators…their Black Sholes Option Pricing Model…their mathematicians…their risk figures… They had some of the finest minds in the country – or at least, some of the finest minds money could buy on Wall Street.March 18th, 2008 | Bill Bonner+ | 0 comments | Continued
Bear Stearns was on the receiving end of an indirect loan from the Federal Reserve on Friday. Though Bear is the fifth-largest securities firm in the U.S. (and the ninth largest bank in the world), it’s an investment bank, not a commercial lender. The Fed can’t loan directly to investment banks, so the loan had to be routed through a willing third-party, in this case JP Morgan. It turns out that last week’s big US$200 billion loan facility was probably set up to make this three-way transaction possible.March 17th, 2008 | Dan Denning+ | 4 comments | Continued