Bear Stearn almost brought down Wallstreet
Posted by Frugal on March 14th, 2008
Saw the news yet?!
That was a scary tape! On my screen, everything suddenly went into free fall, and then reverse.
Bear Stearn is now down more than 80% from the top, and off 43% just today. What’s gone cannot be made back. So don’t bottom pick these financials just yet. Same thing for Citibank, and many other brokerages and banks. After all these financial blowups, these companies are NO LONGER the same companies with the same earning powers. The balance sheet impairment is going to forbid them to earn as much going forward.
Hold on there. Unfortunately, this probably is not going to be the last one.
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March 14th, 2008 at 7:40 am
Just what I wanted to see turning on CNBC in the morning.
It’s not over yet!
March 15th, 2008 at 11:20 pm
Yup - so much for Larry Kudlow’s theory that this is nearly over.
We are entering a new phase where central banks will be scrambling to prevent derivative counterparties from defaulting. Were that to happen, the entire financial system itself would collapse.