Politics As Usual
Shining a Light on Power and Policy
Tom Shine covers congressional politics for ABC News.
RECENT POSTS
- "The Stories Are Shocking In Their Simplicity And Brutality..."
- "Pipes Have Voltage, Get Shocked In The Shower"
- She May Have to Take the Stand "For Mommy" a Second Time
- The Army Calls A Reverse And Orders Football Star Caleb Campbell To Serve
- "I Have Broken The Cycle Of Obesity..."
- "When I Joined the Navy, I Didn’t Know I Was Gay"
- You Might Not Be Able To Afford The Groceries, But Your Shopping Cart Will Be Clean
- For the Petersons 'The Price is Right'
- 8,763 DISABLED VETS DIED BEFORE THEIR CASES WERE REVIEWED
- HOLY PATRICK LEAHY, BATMAN!
MONTHLY ARCHIVES
« Previous | Main | Next »
Unfounded Rumors and Conjecture Brought Down Bear Stearns
April 03, 2008 10:18 AM
Alan Schwartz, the president and CEO of Bear Stearns says several times in his 3 page written testimony before the Senate Banking Committee that during the week of MARCH 10th Bear Stearns "WAS ADEQUATELY CAPITALIZED and HAD A SUBSTANTIAL LIQUIDITY CUSHION..."
But he adds that "due to the stressed condition of the CREDIT MARKET as a whole and the UNPRECEDENTED SPEED at which RUMORS and SPECULATION TRAVEL and ECHO THROUGH the MODERN FINANCIAL MEDIA ENVIRONMENT, the RUMORS and SPECULATION became a SELF-FULFILLING PROPHECY..."
He starts the very next paragraph "I WANT TO EMPHASIZE THAT THE IMPETUS FOR THE RUN ON BEAR STEARNS was in the FIRST INSTANCE the RESULT OF A LACK OF CONFIDENCE NOT a LACK OF CAPITAL or LIQUIDITY. Throughout this period, BEAR STEARNS had a CAPITAL CUSHION WELL ABOVE WHAT WAS REQUIRED TO MEET REGULATORY STANDARDS. However, by Thursday of that week a tipping point was reached on liquidity. THE MARKET RUMORS BECAME SELF-FULFILLING and BEAR STEARNs' LIQUIDITY POOL BEGAN TO FALL SHARPLY."
April 3, 2008 | Permalink | User Comments (1)
You can follow this conversation by subscribing to the comment feed for this post.
Is this a two day late joke?
Posted by: katrina | Apr 3, 2008 11:09:35 AM
Post a comment
