are doomed to repeat it. The Bear Stearns story reminds me a lot of Enron's final days in a way. Both have executives saying everything was OK but seemed oblivious to market conditions and other issues surrounding their firms. Both faced liquidity issues and had lenders seem to lose confidence causing their stock price to have huge drops in short time frames. The government became a big player in the Enron case and seems to be stepping in that direction with the announcement that emergency funding from the Federal Reserve.
If you have never read Conspiracy of Fools I highly recommend it. Kurt Eichenwald's book is the fastest 660 page book I have ever read. The story of the collapse of Enron is similar in several ways to the Bear Stearns story from what I have read in my spare time about the situation.
I can only hope that Bear will be the only investment bank to go down. I happen to be employed indirectly by a similar firm to Bearand there are several rumors of the firm's liquidity issues out in the market. Although not as severe as Bear's situation, I think all investment banks with high exposure to the mortgage crisis will have someone question their liquidity in the next several weeks.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment