Bear Stearns Collapses
The Bearish Rumors Killed Us... Earlier this week rumours of a liquidity crisis at Bear Stearns.
After denying earlier this week that access to capital was at risk and numerous reassurances of solvency from executive management...
CEO Alan Schwartz, said earlier this week that the company's liquidity cushion was sufficient to weather the credit-market contraction.
Today, "We have tried to confront and dispel these rumors and parse fact from fiction.
Nevertheless, amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated."
Ok, so Bear said the rumors that it was facing liquidity issues caused its liquidity position in the last 24 hours to deteriorate. Hmmm, maybe the rumours were true.
Bear is the second-largest underwriter of U.S. mortgage bonds and their long-term counterparty credit rating was reduced three levels to BBB by S&P.
The Federal Reserve issued a press release that stated it is "monitoring market developments closely and will continue to provide liquidity as needed."
The Fed invoked a law last used four decades ago to keep Bear from collapsing after the securities firm approached the central bank for emergency funding.
Bear will receive financing as needed from JPMorgan Chases and the Federal Reserve Bank of New York. Bear is down 47% and is trading at its lowest level since 1998.
The Fed Board unanimously approved the JPMorgan Chase and Bear Stearns arrangement.
Shrub Jr. commented at the Economic Club of New York:
"Our economy obviously is going through a tough time. In the long run, I'm confident our economy will continue to grow because the foundation is solid."
The Nattering One muses... Shrubs words make me feel confident, how bout you?
Bond guarantor ACA, then Countrywide, now Bear Stearns. Bear was on top of our dishonorable mention list.
Our trifecta is complete, however, we still need a bank to make things right.
WaMu & Citigroup lead the pack, closely followed by the Ambac, MBIA, PMI & MGIC.
After denying earlier this week that access to capital was at risk and numerous reassurances of solvency from executive management...
CEO Alan Schwartz, said earlier this week that the company's liquidity cushion was sufficient to weather the credit-market contraction.
Today, "We have tried to confront and dispel these rumors and parse fact from fiction.
Nevertheless, amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated."
Ok, so Bear said the rumors that it was facing liquidity issues caused its liquidity position in the last 24 hours to deteriorate. Hmmm, maybe the rumours were true.
Bear is the second-largest underwriter of U.S. mortgage bonds and their long-term counterparty credit rating was reduced three levels to BBB by S&P.
The Federal Reserve issued a press release that stated it is "monitoring market developments closely and will continue to provide liquidity as needed."
The Fed invoked a law last used four decades ago to keep Bear from collapsing after the securities firm approached the central bank for emergency funding.
Bear will receive financing as needed from JPMorgan Chases and the Federal Reserve Bank of New York. Bear is down 47% and is trading at its lowest level since 1998.
The Fed Board unanimously approved the JPMorgan Chase and Bear Stearns arrangement.
Shrub Jr. commented at the Economic Club of New York:
"Our economy obviously is going through a tough time. In the long run, I'm confident our economy will continue to grow because the foundation is solid."
The Nattering One muses... Shrubs words make me feel confident, how bout you?
Bond guarantor ACA, then Countrywide, now Bear Stearns. Bear was on top of our dishonorable mention list.
Our trifecta is complete, however, we still need a bank to make things right.
WaMu & Citigroup lead the pack, closely followed by the Ambac, MBIA, PMI & MGIC.
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