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the rumors surrounding Lehman might be self-fulfilling if the bonds and shares are hurt enough.
http://online.wsj.com/article/SB120553782947338181.html?mod=hps_us_insi… the article mentions lehman and its similarities/differences vs. bear in terms of liquidity. pretty good read.
The ones you cite, though troubled in some respects, are much bigger and less dependent on anything mortgage-related to bring in revenue.
Who knows, I could be wrong and maybe someone else will collapse over night or next week.
But generally when there's a bailout like this, it indicates that we've hit the bottom of a liquidity crisis... same kind of situation happened with LTCM in the late 90's.
Considering this recession hasn't even officially started yet (according to the official definition), I think we have a ways to go and things won't get much better until 2009 or later.
But I'm not sure another bank will need to be bailed out.
Lehman will be next to go. Closed at -15% today. Its only strength is debt, which is now down the toilet. Second-rate bank.
bear blow up means more write downs for all banks that had any credit risk w/ bear
chain reaction unless govt repeals stupid accounting standards
you can short them all. but i picked ms, leh, c, and fnm
I'm curious to know how people feel about UBS' situation as well.
This is pure reflexivity in action.
Can somebody please explain, what exactly happenned at Bear ? Obviously, it was NOT the prime-brokerage unit, that was in trouble, right ? It had to be their prop-trading desks...most likely fixed-income....any ideas, how this played out ?
run on the bank. counterparties started withdrawing their cash, or ask for more collateral from Bear. Bear ended up not having enough liquidity to carry on day-to-day operations, or fund its liabilities. In other words, it became insolvent.
This guy's currently at Bear. Give him a few reviews/suggestions, looks like he might need a resume tune-up pretty soon:
http://razume.com/resume/view/322
looks like jpm is buying bear.
http://online.wsj.com/article/SB120569598608739825.html?mod=djemalertNE…
I wonder if JPM will revoke the Bear analyst offers, or will continue honoring them. If the latter, wouldn't it be a good deal for kids who are originally going to work for Bear? I mean now they get to work for a more prestigious outfit ;)
I think JPM may buyout the offers as they dont really need Bear's IB division. Just my two cents.
Don't count out financial sponsors as potential buyers.
Expect details of a KKR / Flowers bid to surface in the near term.
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