Bear Stearns

THE dramatic $2-a-share rescue of Bear Stearns was, almost everyone agreed at the time, the best way out of an awful situation.

Due to its participation in underwriting subprime loans, Bear Stearns was one of the first casualties of the current financial crisis.

But the meeting left Bear Stearns's representatives concerned that Mr. Flowers simply was trying to gauge their desperation.

Some lawmakers and government officials contend the problems at Bear Stearns might have been prevented with more oversight.

Mr. Flowers and a team of bankers were trying to arrange a last-minute buyout of Bear Stearns Cos. , the struggling investment bank.

As you know, in March the Federal Reserve acted to prevent the default of the investment bank Bear Stearns.

Rising lease rates prefigured the last big move in gold back in the spring of 2007 just as the two Bear Stearns hedge funds were blowing up.

Then came the whopper: on July 18, Bear Stearns admitted it could not figure out how much money it had lost.

Short of an implosion to rival that of Bear Stearns in March, however, the rumours are unlikely to become real deals for the time being.

The growing gloom spurred some of Bear Stearns's trading partners to try to get out of transactions with the firm.

Bear Stearns's "shotgun marriage" to J. P. Morgan "is not the sort of thing we set out to do, " he told the audience.

Bear Stearns had been helped in March for fear of chaos in derivatives markets, in which it was a leading player as a prime broker.

Bear Stearns collapsed largely because other institutions stopped doing business with it, fearing it might be in trouble.

He said he had viewed Bear Stearns as a place where 'your own individual actions can have a significant impact on the entire endeavor. '

Buying a piece of Bear Stearns was attractive to KKR as an entree into the lucrative brokerage business at a time when prices were cheap.

But Bear Stearns was bailed out, creating a perception that if it was "too big to fail" , so were all its competitors.

In the days leading up to the offer from JPMorgan, Bear Stearns released statements suggesting the company's finances were sound.

Managers at Lehman Brothers and Bear Stearns owned lots of shares, yet did not run their companies for the long term.

Though Bear Stearns hadn't yet seen disastrous outflows of money, Mr. Schwartz said he didn't know what the next day would bring.

Bear Stearns is still standing only because JPMorgan Chase was solid enough to prop it up.

By contrast, he said, Bear Stearns and A. I. G. had more trustworthy collateral.

But the Bear Stearns case did not go to the heart of the unethical behavior at the core of the financial crisis.

At lunchtime the next day, as employees prepared for the holidays, Bear Stearns received bleak news.

And a year ago last weekend, when Bear Stearns imploded, that cleared a lot of pessimism. Global markets leapt 13%.

Some may have recalled the trek that Bear Stearns made to China in the months before the bank imploded.

I said in the summer of 2007 when Bear Stearns was starting to shake that we were about to hit a 5-7 tough patch for the US.

He said JPMorgan's exposure was hurt further by the acquisition of crippled Bear Stearns in March.

For the US, the rescue of Bear Stearns was the moment when that option evaporated.

Traditionally, Bear Stearns, Goldman Sachs and Morgan Stanley have had the dominant prime brokerage units both in the US and overseas.

Investors, however, complain that bankers' high bonuses did not save Lehman or Bear Stearns.

The next step was the run on the big US broker-dealers: first Bear Stearns lost its liquidity in days.

A bankruptcy filing for Bear Stearns -- with its nearly 400 different subsidiaries -- would be immensely complicated.

As in those cases, the Bear Stearns funds did not lose money in the manner most people think.

She was a corporate analyst for Standard and Poors and Bear Stearns in New York City and an Assistant Treasurer at Viacom.

That cost the brokerage a chance for capital and a coveted endorsement of Bear Stearns's creditworthiness.

At least when the Fed rescued Bear Stearns in March, it could turn itself into the de facto regulator of investment banks.

When investors became concerned that Bear Stearns wouldn't be able to settle its trades with clients, that confidence evaporated in a flash.

Under the leadership of Jamie Dimon, the bank has rescued Bear Stearns on Wall Street and Washington Mutual, a mortgage lender.

Tell that to Bear Stearns, Wall Street's fifth-largest investment bank, the most spectacular corporate casualty so far of the credit crisis.

Bear Stearns -- with its immense stockpile of mortgages and related securities -- was particularly vulnerable.

He then worked at the legendary Odyssey Partners for two years before moving on to mergers and acquisitions at the scrappy Bear Stearns.

The collapse of Bear Stearns was triggered by a run of its creditors and customers, analogous to the run of depositors on a commercial bank.

Chinese government officials say a state-run investment group may bid for a stake in U. S. investment firm Bear Stearns.

Once management realized a deal couldn't get done to its liking, it sought government assistance for a deal, like we saw with Bear Stearns.

If Dubai is the sovereign debt equivalent of Northern Rock, then Greece might be its Bear Stearns and Japan its Lehman Brothers.

Funny how that didn't apply to Bear Stearns, which the Feds at least sold for a couple of bucks to JP Morgan.

Each successive rescue, from Bear Stearns to Citigroup, has affected different parts of the capital structure in different ways.

A key goal: building confidence on Wall Street to prevent the kind of liquidity crisis that forced Bear Stearns Cos. into the arms of J.

Mine is not a judgment on whether the Fed was right to rescue Bear Stearns from bankruptcy.

But, in the aftermath of the Bear Stearns rescue, the overhaul of financial regulation is likely to be far broader.

Over the next few weeks, Bear Stearns's competitors disclosed losses from bad mortgage-related bets.

Share prices have recovered since the Bear Stearns rescue, even as economic statistics have been gloomy.

For the moment, gradualism is the right path: it is cheaper and less prone to moral hazard (ask investors in Bear Stearns).

These are the volatile instruments that, had Bear Stearns collapsed, could have brought down the financial system with it.

So far so good, despite mark-to-market losses on the securities it acquired bailing out Bear Stearns and American International Group.

China yesterday let slip one of the worst kept secrets of the summer: that Citic Bank is considering buying a stake in Bear Stearns.

Inside Bear Stearns's Madison Avenue headquarters, executives hurried to put out the fires.

The bank began screening Bear Stearns employees for hire.

THE decline and fall of Bear Stearns illustrates both an old truth and a new one .

The critical point is that, like Bear Stearns, Lehman was just an extreme case of a general phenomenon.

Some of Bear Stearns's more superstitious traders even objected to the strategy's name: They were tempting fate by invoking chaos.

So far the markets have taken bad news in their stride, easily digesting the problems at two Bear Stearns hedge funds.

The New York Times says the Federal Reserve is reluctant to help finance J. P. Morgan's higher bid for Bear Stearns.

Bear Stearns alone faces $18 billion in securities-fraud claims out of an industry total of roughly $200 billion, calculates Mr Whalen.

Goldman Sachs, Morgan Stanley and Bear Stearns are widely acknowledged to have the largest prime brokerage businesses.

Shortly before 12: 30 that day, Bear Stearns executives began to gather on the 12th floor for a weekly lunch to discuss market issues.

The fire sale of Bear Stearns, the US investment bank, brings the credit crisis to a new, more dangerous phase.

It is trading around the 30 level, or near its peak in March when Bear Stearns had to be rescued.

Soon, though, the lenders forced Bear Stearns to extend one of the portfolios $1. 6 billion of its own money to keep it afloat.

Since the rescue of Bear Stearns in March, prices in the loan market had recovered as funds stepped in to pick up bargains.

Morgan Stanley landed the project Jumbo mandate, in conjunction with Bear Stearns, but project Colorado was a failure.

It is three years since Bear Stearns was pushed into the arms of J P Morgan and the fundamental debt problem has not been resolved.

On Wednesday evening, Mr. Dimon visited Bear Stearns to talk with hundreds of restive managers in the firm's second-floor auditorium.

The Fed pressured Bear Stearns to sell itself, but a misstep in the hastily drawn agreement nearly scuttled the deal.

After the rescue of Bear Stearns in March, the Fed agreed to back investment banks with its balance sheet.

Bear Stearns , the fifth largest American bank, is sold to JP Morgan Chase for a knockdown price of $236m, narrowly avoiding bankruptcy .

As the day progressed, dire rumors kept Bear Stearns's traders distracted, worrying about both their jobs and their savings.

Nor does the 50% number include any of the asset swaps done by the Federal Reserve when they bailed out Bear Stearns, AIG and others.

Finally, Bear Stearns agreed to a price of about $10 a share, which stockholders are poised to approve at a meeting Thursday.

Perhaps then, Flowers reasoned, it could proceed with a purchase of Bear Stearns's core bond and stock units.

The March 2008 collapse of the fifth largest investment bank, Bear Stearns, should have been an indication that urgent action was needed.

Many Bear Stearns employees, who collectively hold about 30% of its shares, are threatening to vote against the deal.

The Bear Stearns investments are held by a company owned jointly by the New York Fed and JPMorganChase & Co.

Wall Street remains skittish about financial stocks since a run on Bear Stearns caused the U.

Dodd-Frank forbids specific support for a single company, as was done for Bear Stearns, AIG, Citigroup and Bank of America.

The recent collapse of two hedge funds at Bear Stearns Asset Management raises two questions few people can answer.

Strikingly, the financial conglomerate is paying slightly higher interest on its five-year debt than Lehman or Bear Stearns.

It emerged that the US government has agreed to take on any credit losses suffered by the Fed on its $30bn loan to Bear Stearns.

Elsewhere in the building that afternoon, Bear Stearns's board was deliberating over Mr. Spector's resignation.

Suddenly, there was the prospect of another major investment bank buckling six months after the loss of Bear Stearns.

Remember when plenty of people were worried about the "unjustified" intrusion of the Federal Reserve into the Bear Stearns takeover?

Bear Stearns and Merrill Lynch found shelter in the arms of two big universal banks, JPMorgan Chase and Bank of America.

J. P. Morgan, which hired nearly half the firm's 14, 000 employees, has taken pains to help Bear Stearns workers displaced by the merger.

"The basis and preconditions for strategic co-operation with Bear Stearns no longer exist, " Citic said.

Bear Stearns, like other securities firms, depends on continuous loans to fund its daily operations.

Both survivors say they are nowhere near as exposed to the risk of a sudden dearth of liquidity as Bear Stearns was.

Unlike Bear Stearns, Lehman Brothers has access to funds from the Federal Reserve through the central bank's discount window.

Many Bear Stearns veterans began pushing hard for Mr. Cayne's ouster, arguing the firm needed a more engaged leader.

Less than a decade after these changes, the investment firm Bear Stearns failed.

Tattered "for rent" signs hang in the windows of the building that once housed Bear Stearns.

Few predicted the severity of this crisis, yet once Bear Stearns collapsed there could be no excuses.

In 2007 Bear Stearns and Goldman Sachs were among the banks that recapitalised troubled hedge fund units.

By the time of the Bear Stearns collapse in March, that spread had more than quintupled to 342. 5 points.

When Bear Stearns and Lehman Brothers went under, the world realized that the banks kept much of the toxic assets at home. '

Bear Stearns last month revealed large losses at two hedge funds that owned subprime-related CDOs - but had trouble quantifying the losses.

Bear Stearns extended it to investment banks, and AIG to all financial institutions.

Those who believed that the Bear Stearns collapse in March marked a turning point in the credit crunch were disappointed.

Ever since Bear Stearns collapsed in March, investors and rival bankers have questioned whether Lehman might suffer a similar fate.

Bear Stearns bondholders were made whole and its stockholders lost most of their money.

Confidence, which eroded steadily after the demise of Bear Stearns, must be restored.

'JP Morgan Chase and Federal Reserve Bank of New York to Provide Financing to Bear Stearns, ' it read.

This was a shock since investors had thought the US government would protect big banks, because it prevented a bankruptcy at Bear Stearns.

But as investors in Bear Stearns will recall, shareholders can pay a stiff price even in a so-called bailout.

True, the rescue of Bear Stearns seemed to avert the implosion of the financial system.

Bear Stearns has also received calls from concerned counterparties seeking reassurance.

In March, the Federal Reserve asked it to manage $29bn in distressed mortgage securities from Bear Stearns, the investment bank.

This left Mr Dimon free to snap up tottering rivals including Bear Stearns, an investment bank, and Washington Mutual, a thrift.

Goldman Sachs, Bear Stearns and Lehman Brothers have all announced record profits and beaten analysts' expectations in the process.

In both Bear Stearns and Lehman Brothers, for instance, employees owned a large part of the firms' shares.

The collapse last month of the nation's fifth largest investment bank, Bear Stearns, showed the risks.

That question has been hovering, half-stated, over the financial system ever since Bear Stearns blew up.

What happened, for instance, to the idea of "too interconnected to fail" that held such weight after the Bear Stearns rescue?

I do not think any company is interested in repeating the experience of Bear Stearns.

Funds and other financial players were betting that Bear Stearns could run out of cash.

By Tuesday morning, J. P. Morgan's lawyers were arguing with their counterparts at Bear Stearns over the yearlong guarantee.

And to the extent that Bear Stearns's employees owned one-third of the firm, they already looked to the longer term.

If J. P. Morgan wouldn't guarantee Bear Stearns's trades on Monday, the firm would most likely have to file for bankruptcy protection.

The collapse of an institution as big as Bear Stearns is a significant and rare event.

Among other things, Messrs. Schwartz and Cayne feared a deal might turn off Bear Stearns clients that competed with KKR.

Another weak spot is the $62 trillion market for credit-default swaps, which has given regulators nightmares since the loss of Bear Stearns.

The meltdown of Bear Stearns Cos. in March marked the collapse of the modern securities industry, and the careers of some on Wall Street.

JPMorgan Chase made a lowball offer for WaMu soon after buying Bear Stearns, but was rebuffed.

My investments are probably pretty much gone . . . I had a lot of stocks - bank stocks, Bear Stearns, they're gone.

For one, the near-collapse of Bear Stearns has shown that some banks' very survival may be at stake.

A Bear Stearns team has been "working diligently" ever since to tot up the losses.

On Oct. 22, Bear Stearns announced a joint venture in Asia that included a $1 billion cross-investment between the two companies.

Banks like Goldman Sachs no longer had Lehman Bros. or Bear Stearns to compete with.

Cases in point: Bear Stearns and Lehman, both of which financed large investments in risky securities primarily with short-term borrowing.

Afterward, Bear Stearns shares wavered slightly before rising above $66, where they stayed until midafternoon.

JPMorgan Chase and Royal Bank of Scotland are set to shed jobs at Bear Stearns and ABN AMRO's wholesale arm respectively.

In turn, Bear Stearns executives considered suing J. P. Morgan, and the firm nearly was forced to liquidate its assets.

Some partners, spotting a chance to profit, made bets against Bear Stearns, helping accelerate its demise.

Former Bear Stearns executive Frederic Marino started an $800 million hedge fund with seed capital from Qaddafi's government.

Bear Stearns executives believed another public statement was needed.

By early Friday morning March 14, Bear Stearns's managers were running out of steam.

Inside Bear Stearns, though, skirmishes about its mortgage holdings at times grew heated.

The financial crisis also claimed the life of a veteran Bear Stearns manager.

THE collapse of first Bear Stearns and then Lehman Brothers in 2008 were the emblematic events that triggered the financial crisis.

But many who lived through the seven tense months before the deal say Bear Stearns imploded because it was at war with itself.

News about the insolvency crunch of investment bank Bear Stearns and mortgage giant Fannie Mae triggered panic sale.

Credit spreads widened by 50 basis points, returning to levels that were set during the Bear Stearns collapse in March.

There were only two people indicted for this, the guys who ran the Bear Stearns hedge funds. . .

All except Bear Stearns now earn roughly half of their non-retail revenues outside America.

Bear Stearns would eventually return the money for about 2 per cent of Citic.

And the Fed agreed in March to provide twenty-nine billion dollars in loans for the sale of Bear Stearns.

The Bear Stearns funds held opposing positions that unexpectedly moved in the same direction.

The first big sign of trouble on Wall Street. Bear Stearns teeters , but it's bought before collapsing.

This problem cropped up when two hedge funds run by Bear Stearns, an investment bank, got into trouble in June.

But, there again, no mainstream analyst or commentator foretold the demise of Bear Stearns or the collapse of Lehman Brothers.

Bear Stearns executives hosted a conference call that day meant to reassure investors.

They reasoned a deal with the Chinese investment bank would bring in money and help increase Bear Stearns's miniscule presence in Asia.

Similar fears had led to the forced sale of Bear Stearns in March .

After the rescue of the Bear Stearns investment bank in March 2008, Americans' homing instincts were even greater.

Similarly, Lehman Brothers and Bear Stearns, with assets of $600bn and $400bn, were also small compared with the US financial sector.

Around 7 p. m. , some of Bear Stearns's top executives gathered in Mr. Molinaro's sixth-floor conference room.

By Sunday, Bear Stearns's sleek, black tower in midtown Manhattan bustled with activity.

The two were on vacation in Rome this past March when word of Bear Stearns's own cash crisis broke.

In the following months, Bear Stearns reported billions of dollars in writedowns, as did many of its Wall Street peers.

They were still in Italy on March 16, when Bear Stearns announced its sale to J. P. Morgan.

Then, in March, Morgan Chase bought Bear Stearns in a rescue sale.

In the weeks after rejecting KKR's approach, Bear Stearns received other offers of capital.

Bear Stearns is still fresh in people's minds.

Then, in March, J. P. Morgan Chase bought Bear Stearns in a rescue sale.

Last month, 2 hedge funds operated by the investment bank Bear Stearns nearly collapsed under debt.

Six months earlier, the Federal Reserve and the Treasury had stepped in to prevent the rival Bear Stearns from filing for bankruptcy.

Bear Stearns was nowhere near as central to the market's current difficulties.

But this time around, Bear Stearns's business was so weak, it wasn't eligible for a Chapter 11 reorganization filing.

In addition, Lehman had access to special emergency lending from the Fed, something Bear Stearns didn't have when it was struggling.

Last week, the Federal Reserve pushed through a deal for J. P. Morgan Chase to buy Bear Stearns for two dollars a share.

In 2007, Bear Stearns stumbled, as two internal hedge funds that invested in risky mortgage securities failed.

Some regulation is inevitable, and the Bear Stearns rescue makes reform essential in the US.

It bought Bear Stearns for more than two-billion dollars earlier this year.

Bear Stearns's advisers notified J. P. Morgan, which scheduled a conference call for investors to discuss the deal at 8 p. m.

Those missteps are expected to have a lasting impact beyond the people who once worked at Bear Stearns or owned its stock.

The Chinese bank had been weighing a $1bn cross-investment with the now-defunct Bear Stearns.

He also supported the Fed's willingness to engineer a takeover of Bear Stearns.

Bear Stearns provided just that: a large franchise with a promising future.

Two former hedge-fund managers at Bear Stearns were acquitted of fraud.

The hedge fund also dealt with other banks, including Bear Stearns.

The Fed created the PDCF in March 2008 after the demise of Bear Stearns to ease investment banks' liquidity problems.

In its last three years, Bear Stearns paid $11. 3 billion in employee compensation and benefits.

Last week, the Federal Reserve pushed through a deal for JP (J. P. )Morgan Chase to buy Mell sterns (Bear Stearns) for 2 dollars a share.

Things only got testier when Bear Stearns announced abysmal fourth-quarter results on Dec.

For Bear Stearns, the venture will raise its limited profile in Asia.

He excelled in Bear Stearns's close-knit culture, associates say.

These redundancies came on top of the estimated 23, 000 jobs lost after the collapses of Bear Stearns and Lehman Brothers.

Bear Stearns was rescued but nearly $30bn of real estate exposure was left at the Fed.

It grew obvious to Treasury Secretary Henry Paulson Jr. that Bear Stearns wouldn't last the weekend.

The financing is being secured by liens on virtually all of Bear Stearns' assets.

Both Bear Stearns and Deutsche Bank declined to comment.

"Things will change, " says a trader who worked at Bear Stearns.

In 2007 Eugene Perma, a hair-care group, filed for sauvegarde and thus avoided a demand for repayment from Bear Stearns, an American bank.

Investment bank Bear Stearns will be taken over by rival JPMorgan Chase.

There were reasons for saying No to Lehman that were not there for Bear Stearns.

If that fails, will the government be forced, as with Bear Stearns, to engineer a takeover by a rival?

Bear Stearns's offices were then filling up with lawyers.

Put simply, Bear Stearns was deemed too systemically important to fail.

The government bought the mortgage-related investments while rescuing AIG and Bear Stearns.

Shanghai Representitive Office Bear Stearns Co. Inc.

In October 2007, the firm reached a deal with Bear Stearns for each to invest $1 billion in the other.

Rumor on Wall Street had it Bear Stearns was strapped for cash.

The offering comes a month after JPMorgan agreed to buy Bear Stearns Cos. , keeping the investment bank from going bankrupt.

Bear Stearns shares rose meagerly but backtracked days later.

Last week the Federal Reserve pushed though a deal for JP Morgan chase to buy bell sterns (Bear Stearns)for two dollars a share.

Bear Stearns, Lehman Brothers and Merrill Lynch collapsed because they took massive positions in the opposite direction.

Bear Stearns shares were strong.

Considerations of this type were very much in our minds during the Bear Stearns episode in March.

The first public securitization of CRA loans started in 1997 by Bear Stearns.

Before the opening bell, Bear Stearns shocked Wall Street when it said its cash position had unraveled in the past 24 hours.

Two former Bear Stearns managers were arrested this morning on securities fraud and other charges.

A new book analyses how the near-collapse of Bear Stearns, exactly a year ago, marked the moment when Wall Street was knocked to its senses

Having seen the fate that befell Bear Stearns, he had six months to find a buyer.

Fast-forward to March 2008 when it broke through $1, 000 for the first time on safe-haven buying as Bear Stearns teetered.

This is fairly reliable but, as Bear Stearns showed, in a market meltdown it can dry up without central-bank support.

Bear Stearns's shares skidded, ending the day at $62. 30.

The brokerage had been in talks about investing in Bear Stearns before the investment bank collapsed in 2008.

The precious metal crossed $1, 000 an ounce for the first time as Bear Stearns was collapsing in early 2008.

Ten years ago, Bear Stearns could probably have failed without dragging down the system.

What has happened is that many investment banks, such as Bear Stearns and Lehman Brothers, have ceased to exist.

Citic Bank trades at around 3. 3 times book value, compared with 1. 3 times for Bear Stearns.

The other pieces, a joint venture in Hong Kong and Citic Securities' investment in Bear Stearns are beyond Beijing's control.

Last week, the government lost its case against two managers at Bear Stearns, the first investment bank to fail last year.

The Hong Kong market has plunged in the last few weeks following a string of bad news from the US, including the collapse of Bear Stearns.

But the Fed's lending commitments have soared: $29 billion to back the assets of Bear Stearns, a failed investment bank;

(There are plenty of people who also believe Goldman exacerbated the collapses of Bear Stearns and Lehman, too. )