Investment Banks & Brokers
March 14, 2008 - Lenders and hedge funds wanted their money back from Bear Stearns = capital and liquidity crisis. JP Morgan Chase (main clearing bank for Bear Stearns), Federal Reserve Bank of New York threw financial life preserver (secured line of credit) to 85-year old Bear Stearns to keep it above water for the next 28 days until it either improves its financial condition or it finds a buyer for itself. As a result, biggest one-day drop in trading history of stock of Bear Stearns, down $27 (47%, down $30.15 or 53% at intraday low); lowest close in more than 9 years (October 14, 1998); 2008 - lost $6.8 billion (66%) of its market capitalization
In addition, Lehman Brothers announced it had secured a 3-year credit line from its banks...its stock sank 15%.
No comments:
Post a Comment