Joe Meriwether going under?

Landis82 · Mar 19, 2008

http://www.derivativesstrategy.com/magazine/archive/1998/0398shrt.asp

http://www.derivativesstrategy.com/magazine/archive/2000/0800play.asp

marketsurfer · Mar 19, 2008

Quote from Landis82:

http://www.derivativesstrategy.com/magazine/archive/1998/0398shrt.asp

http://www.derivativesstrategy.com/magazine/archive/2000/0800play.asp
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i am speaking of the latest situation, not 1997. forgive me for the misunderstanding.

surf

Spooz Top · Mar 19, 2008

Quote from me2:

http://bespokeinvest.typepad.com/bespoke/2008/03/you-dont-help-u.html

You Don't Help Us Out, You Get Sold For $2

Ironically, Bear Stearns was the lone big investment bank that declined to participate in the Long-Term Capital Management bailout with the New York Fed. From Wikipedia:

Goldman Sachs, AIG and Berkshire Hathaway offered then to buy out the fund's partners for $250 million, to inject $4 billion and to operate LTCM within Goldman Sachs's own trading. The offer was rejected and the same day the Federal Reserve Bank of New York organized a bail out of $3.625 billion by the major creditors to avoid a wider collapse in the financial markets.

The contributions from the various institutions were as follows: $300 million: Bankers Trust, Barclays, Chase, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, Merrill Lynch, J.P.Morgan, Morgan Stanley, Salomon Smith Barney, UBS

$125 million: SociÃ©tÃ© GÃ©nÃ©rale

$100 million: Lehman Brothers, Paribas

Bear Stearns declined to participate.

In the book When Genius Failed, which gives a detailed account of the fall of Long-Term Capital Management (LTCM), there is a conversation between John Meriwether and an executive from Bear Stearns where the Bear executive sadly explains to his friend why he thought LTCM was finished. He says, "When you're down by half, people figure you can go down all the way. They're going to push the market against you. They're not going to roll [refinance] your trades. You're finished." Sound familiar?

Two dollars a share in JP Morgan stock is pretty much a slap in the face as far as a buyout goes. Did the NY Fed, JP Morgan and other banks working on the deal this weekend have 1998 on their mind when ultimately deciding Bear's fate?
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good post & thanks for the correction.......as that`s exactly what it was, BSC refused to step up jeopardizing the entire bailout.
book was a good read........typical to hear how Goldman & Corzine just pilliaged LTCM`s coffers like a bunch of vultures.

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Joe Meriwether going under?

Landis82

marketsurfer

Spooz Top