Bear Stearns

[Fittster]

Can someone explain in numpty language if this the same sort of problem as Northern Rock faced?

http://news.bbc.co.uk/1/hi/business/7296678.stm 

[Tony*T3]

Fittster said:

Can someone explain in numpty language if this the same sort of problem as Northern Rock faced?

http://news.bbc.co.uk/1/hi/business/7296678.stm 

yes. Borrowing short term (from other banks) to fund long term loans (lending to people for Mortgages).

[Skipppy]

Euro - Dollar could hit 1.58 by the end of the day!

[Vesuvius 996]

Fittster said:

Can someone explain in numpty language if this the same sort of problem as Northern Rock faced?

http://news.bbc.co.uk/1/hi/business/7296678.stm 

It's worse. Much worse.

Same issue (liquidity) but this will precipitate a disaster.


Armageddon is upon us.

[mitzy]

Vesuvius 996 said:

Fittster said:

Can someone explain in numpty language if this the same sort of problem as Northern Rock faced?

http://news.bbc.co.uk/1/hi/business/7296678.stm 

It's worse. Much worse.

Same issue (liquidity) but this will precipitate a disaster.


Armageddon is upon us.

In the words of Iron Maiden "Run to the hills"

[Vesuvius 996]

Alan Schwartz president and chief executive officer of Bear Stearns said:

"Bear Stearns has been the subject of a multitude of market rumours regarding our liquidity.

"We have tried to confront and dispel these rumours and parse fact from fiction.

"Amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated."

"We took this important step to restore confidence in us in the marketplace, strengthen our liquidity and allow us to continue normal operations."

babelfish said:

We're screwed. Start the car.

This is VERY VERY bad news.

Edited by Vesuvius 996 on Friday 14th March 14:35

[Fittster]

Vesuvius 996 said:

Fittster said:

Can someone explain in numpty language if this the same sort of problem as Northern Rock faced?

http://news.bbc.co.uk/1/hi/business/7296678.stm 

It's worse. Much worse.

You mean we are going to have to put up with more gloating posts from Golden Boy!!

[Skipppy]

Northern Rock x 5 at least. They could potentially drag a few other banks, hedge funds and asset managers into the problem with them...

[mitzy]

"If you want a friend buy a dog"

[manu]

Skipppy said:

Northern Rock x 5 at least. They could potentially drag a few other banks, hedge funds and asset managers into the problem with them...

You sure they are that big? Didn't NR have some £120bn of Mortgage assets?

[philelmer]

Vesuvius 996] said:

This is VERY VERY bad news.

So can anyone explain in straightforward terms, assuming that I (for example) am not a financial analyst, and don't really know very much about how one business collapsing will throw the earth off its orbit?

Sorry, that sounded quite facetious (sp?) didn't it. What I was after is maybe a website or a brief outline of WHY this is, and I quote, "very very bad news".

[Vesuvius 996]

philelmer said:

Vesuvius 996] said:

This is VERY VERY bad news.

So can anyone explain in straightforward terms, assuming that I (for example) am not a financial analyst, and don't really know very much about how one business collapsing will throw the earth off its orbit?

Sorry, that sounded quite facetious (sp?) didn't it. What I was after is maybe a website or a brief outline of WHY this is, and I quote, "very very bad news".

1. Absolute lack of confidence in the banking system
2. Absolute lack of funds to be lent between banks, as they keep what they have
3. NO money at all to be lent to you and me (see 2)
4. Mortgages impossible to find at a decent rate (see 3) so when people come off fixed rates (1.4 million of them this year) they will have to pay HUGE HUGE increases, which they can't afford
5. Reposessions a go go (see 4)
6. Housing market crashes
7. People go bankrupt (see 6)


Seriously, the banks will stop lending to each other, and therefore the whole friggin lot comes crashing down.


This DOES affect the man in the street here.

Edited by Vesuvius 996 on Friday 14th March 15:51

[devonshiredave]

Carlyle fund also in some bother - going to default on about $16bil

http://news.bbc.co.uk/1/hi/business/7293663.stm

[Trommel]

Vesuvius 996 said:

Absolute lack of funds to be lent between banks

The money's still there ...

[Vesuvius 996]

Trommel said:

Vesuvius 996 said:

Absolute lack of funds to be lent between banks

The money's still there ...

But those who have it are hoarding it, so no liquidity.

[Vesuvius 996]

devonshiredave said:

Carlyle fund also in some bother - going to default on about $16bil

http://news.bbc.co.uk/1/hi/business/7293663.stm

Carlyle's done for.

They've lost the LOT.

[Dunk76]

Hmmm

So not a good time to be extending one's mortgage for a loft conversion and buying a new car on the knock then?

[philelmer]

Cheers for that - got the basic concept through the walls of my skull.

[mitzy]

Vesuvius 996 said:

devonshiredave said:

Carlyle fund also in some bother - going to default on about $16bil

http://news.bbc.co.uk/1/hi/business/7293663.stm

Carlyle's done for.

They've lost the LOT.

You always this jolly on a Friday, Where is the Lord, we could do with a bit of cheer.

[thegman]

holy crap bear stearns are screwed. many big banks withdrawing credit lines as we speak