I gotta say, there was more than a few people that bought BSC in the 30s on friday ON MARGIN and all in. Accounts were blown and they have negative balances now. A guy with a 25k account that bought Bear, got margin called today and owes his broker most likely between 20 to 22k today. To show you how serious this is lets say a big retail broker like scottrade had just 1,000 people that blew out like this. (i know the number is probably must higher, but im using a low number just to show you how bad it is.) So say 1,000 people (out of the millions of customers/traders they have) blew out like that. Thats a 20 to 22 million dollar hit scottrade will have to take. If the number is 10,000, thats a 200+ million dollar hit in 1 day. Remember that 133 million shares were owned on friday at 30 bucks per share. That almost a 4 billion dollar hit. Sure some people were not all in and some didnt have margin, but I guarantee, there are brokers out there that are taking some serious hits and when everything clears (t+3) brokers are going to flip. As soon as this becomes news (and you know it will cause you cant hide 200 million dollar hits) i think some people are going to be pulling money out of their trading accounts. Let the panic begin.
Yeah, its just silly of me to panic isnt it? Maybe every time i start to panic i should listen to this guy. http://www.redlasso.com/ClipPlayer.aspx?id=ae47b67d-2523-4946-a2ad-aadc68176f67
Im not a huge fan of Cramer's TV show, but in all honesty, who could have known that BSC was going to be picked up for $2/Share? It's kind of like one of those conversations that go "The day Bear Sterns is bought for $2/share we've all got more to worry about than stocks" etc If anyone had any idea that BSC could become insolvent it wouldn't be such major news... Instead of that link lets use: http://en.wikipedia.org/wiki/Black_swan_theory
As stated on another thread, Cramer was not talking about Bear the stock. The letter asked if they should move their money from Bear - and the answer is no. Even today it is still correct - if you have an account at Bear, you did not lose your money. I am not a fan of Cramer, but I am less of a fan of ignorant message board posters.
Apparently the caller was a little freaked out with wanting to pull their money from BSC. There is absolutely no news about our brokers right now, but do the math. 4 billion dollars lost in 1 day. Most likely by alot of speculators. With the amount of shares that traded hands Im betting at least 50 million shares where held by traders with margin accounts, maybe more, maybe less, but one thing is for sure, that there are some negative accounts out there that can not be paid on right now.
Where do you get the idea that a lot of traders went all in with BSC at Friday's close. Just because you were stupid enough to throw all your money into a possible bankruptcy situation doesn't mean other people made the same mistake. I never wish anyone to lose everything, but your comments about IBKR going bankrupt and how you should get your money back from Scottrade because you violated the PDT rule, make it tough to feel bad for you. The brokers have lots of problems right now, but it is not because everyone went long BSC over the weekend. Only small time gamblers would margin their entire account on that bet.
Yeah you are right, nobody went all in on BSC and nobody bought BSC on margin. Everyones accounts are safe, 1929 never happened and neither did the holocaust or 9/11, right? Also thank you for taking the time to research my name and read everything i have ever wrote to your advantage. Why dont you research my thread on how terrorists were going to attack the U.S. like i predicted in october 2001. That should keep you busy.
Not going to research all your posts, just noticed you crying all over the boards about your BSC loss yesterday, and how you wanted your money bank. Having been in this business for a while now, nothing irritates me more than people who can not take responsibility for their own actions. Not sure how 9/11, the holocaust and 1929 relate to you theory about thousands of people putting their entire accounts into BSC after it drops 30 pts in a day because of liquidity concerns.
He said today he meant BEAR STEARNS BANK where all deposits FDIC insured I newer knew BSC had retail banking do they?