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Bear Sterns Collapse, How It Essay

On March 14, 2008, Bear's stock dropped nearly 40% in the first half-hour of trading, effectively tolling the death-knell of Bear's existence as an independent entity (Boyd 2008). Only a temporary loan from J.P. Morgan Chase and the Federal Reserve Bank of New York prevented Bear from going bankrupt immediately. Who was affected and what happened in the markets

Both investors and employees were affected: "I worked eight years at a firm that promoted me from the back office to investment banking," said one managing director, "I had thousands of shares and thought I could afford to send my kids to private schools and college. It's all gone now." (Boyd 2008). On Wall Street as a whole, pain and suffering reigned: the Dow Jones fell by as much as 300 points at one point and eventually closed 194 points lower. The repercussions were felt around the world: In London, the FTSE 100 fell 150 points and the Japanese Nikkei fell 454 points (Stepek 2008)

Where Bear ended up.: Who bought them and what is their place in the market today

Bear...

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Morgan Chase for $2 a share, under pressure from the Federal Reserve (Stepek 2008). Later, to forestall a class action lawsuit by shareholders in Bear, that sum was increased to $10 a share. The case of Bear is seen as notable because of the new influence of the federal government in the world of investment banking, after decades of nonintervention, as well as the fact that rumors as much as real illiquidity caused the death of Bear Sterns.
Works Cited

Boyd, Robert. "The last days of Bear Sterns." March 31, 2008. Fortune. May 5, 2009

http://money.cnn.com/2008/03/28/magazines/fortune/boyd_bear.fortune/

"Dissecting the Bear Sterns hedge collapse." Investopedia. May 5, 2009

http://www.investopedia.com/articles/07/bear-stearns-collapse.asp

Stepek, John. "A rescue for Bear Stearns, but the Fed is destroying the dollar." Moneyweek.

March 17, 2008. http://www.moneyweek.com/news-and-charts/economics/a-rescue-for-bear-stearns-but-the-fed-is-destroying-the-dollar.aspx

Sources used in this document:
Works Cited

Boyd, Robert. "The last days of Bear Sterns." March 31, 2008. Fortune. May 5, 2009

http://money.cnn.com/2008/03/28/magazines/fortune/boyd_bear.fortune/

"Dissecting the Bear Sterns hedge collapse." Investopedia. May 5, 2009

http://www.investopedia.com/articles/07/bear-stearns-collapse.asp
March 17, 2008. http://www.moneyweek.com/news-and-charts/economics/a-rescue-for-bear-stearns-but-the-fed-is-destroying-the-dollar.aspx
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