Posted on 08/03/2007 9:57:37 PM PDT by BurbankKarl
Bear Stearns Cos., a Wall Street trading titan that recently suffered the collapse of two mortgage-bond funds, took extraordinary measures to bolster its financial position amid investor fears that knocked down its shares and fed a broad stock-market swoon.
The big securities firm also plans to oust Warren Spector, Bear's powerful chief of stock and bond trading and one of the firm's two presidents, according to a person familiar with the matter. Mr. Spector, 49 years old, had been widely viewed as a leading candidate to become the firm's next chief executive. Bear's board is set to meet Monday to discuss Mr. Spector's departure, the person said.
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Lehman stock was hit particularly hard Friday, falling nearly 8%, or $4.67, to $55.78. Lehman says such commitments may be hedged or repriced to reflect market conditions. What that means is that Lehman might make offsetting trades or mark down the value of the positions if the market further deteriorates.
The market moves yesterday highlight just how jittery investors have become about the welfare of Wall Street's biggest firms, which depend on a combination of goodwill and short-term financing to stay in business.
"Everybody's waiting for the second, third and twentieth shoe to drop," said Mike Vogelzang, president of the money-management firm Boston Advisors.
(Excerpt) Read more at online.wsj.com ...
If they put that much risk in a risky market...then die Bear die...
Just pluck it out and flush it.
The Wall Streeters want the US Govt to roll all these bad mortgages into Fannie Mae...to save their sorry asses. That is why they are backing the Dems.
I would settle for the Fed putting the funds rate back where it belongs.
Hubris is a killer.
Bookmark
bear dying would have consequences beyond ‘just deserves’.
This sub-prime issue has gone beyond individual corporate consequences. Liquidity in the new mortgage market has already been impacted notably. If new mortgage applicants suddenly find their rates up a 1% or more, the domino impact in new home construction and thus the economy as a whole is notable.
Many on the street are wondering what if anything the fed and the new chairman are planning to address this, or at least address confidence in them on the street.
I think the biggest shocker I saw this week was 15% of Countrywide’s loans are delinquent...they are the largest writer arent they?
That and Harvard University’s endowment lost at least $350 million last month in one hedge fund. That is some serious ching, even for the blue bloods.
The sub-prime meltdown is drying out money in thelendingmarkets, not just in the mortgage sector but in corporate finance as well. This will push rates for even downmarket e.g. less than $10,000,000 loans up.
As a commercial banker, I am conflicted; on the one hand my stock portfolio is down, on the other hand the little weasels who have been shopping my commitment letters all over town and rubbing my nose in it may be in for a surprise.
Nothing, I hope. America needs to get the housing market back to its fundamentals (pricing the median house at 3x the median income, or 100-120x monthly rent) and bringing back the Greenspan put will not help us get there.
Will you pardon me if my sympathy meter fails to stir?
We sold our house in late '05 and have been happily renting ever since. All my investments have long since been moved into funds with little or no mortgage paper holdings. Lots of people called me a Chicken Little - not anymore.
So Harvard's investment geniuses took their endowment to the hedge fund crap table and didn't make their point? Tough. I've had risky investments go south too, and no one played any violins for me.
See? Every cloud has a silver lining.
Same as the corporate dipshits like Hillary's national health care so they can offload expensive employee benefits onto the Feds. Also eliminates employee griping. They will have to complain to the Feds if their health care stinks
If congress forces Fannie Mae to take these loans and CDOs, the taxpayer wll pay trillions.
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