Friday, June 22, 2007

Bear Stearns Plans $3.2 Billion Bail Out / Largest Since LTCM

How long can they avoid the inevatable? I can smell fear......

Wie lange noch kann das nicht vermeidbare hinausgezögert werden ? Ich kann leichten Agnstschweiß reichen....

Bear Stearns Plans $3.2 Billion Fund Rescue to Halt Fire Sale

Bear Stearns Cos. plans to take on $3.2 billion of loans to stop creditors from seizing assets of one of its money-losing hedge funds in the biggest fund bailout since 1998, people with knowledge of the proposal said.


Largest Since LTCM
``The problem is not what we see happening, but what we don't see,'' said Joseph Mason, associate professor of finance at Drexel University in Philadelphia and co-author of an 84-page study this year on the CDO market. ``We don't know the price of these assets. We don't know which banks are exposed to this sector. These conditions are the classic conditions for financial crises across history.''

The bailout of the fund would be the largest since Long- Term Capital Management LP, which received $3.625 billion from 14 lenders in 1998. After Long-Term Capital, run by John Meriwether, lost $4.6 billion, lenders including Merrill and Bear Stearns agreed to take a stake in the Greenwich, Connecticut-based fund.

The Bear Stearns funds had borrowed $9 billion and made bets of more than $11 billion, one person said. Aside from Merrill, Lehman and JPMorgan, other creditors included Goldman Sachs Group Inc., Citigroup Inc. and Cantor Fitzgerald LP, all in New York. Bank of America Corp., based in Charlotte, North Carolina, Barclays Plc in London and Frankfurt-based Deutsche Bank AG were the other lenders.


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2 Comments:

Anonymous Anonymous said...

Sehr interessant.

Bear Stearns Cos. plans to take on $3.2 billion of loans...

And what will they offer as collateral for these "loans"? Or will these "loans" be more like bribes from banks usw who don't want this paper to be offered on the open market? I smell more than fear.

"The problem is not what we see happening, but what we don't see,"...

Genau.

1:35 AM  
Blogger jmf said...

They can´t hide the truth forever :-)

2:10 AM  

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