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So much for the end of mortgage-related write downs. Bear Stearns stock is down almost 50% today after news hit that the Wall Street firm is short on capital. Many fear that Bear, who was one of the heaviest players in subprime mortgages, didn’t get out of the way soon enough as the wave of defaults started rolling through the system.
From the Market Watch story on Bear Stearns liquidity crisis:
J.P. Morgan said it’s providing Bear with secured funding for up to 28 days, in conjunction with the Federal Reserve Bank of New York.
J.P. Morgan also said it’s working with Bear to secure permanent financing or “other alternatives” for the brokerage firm.
“Our liquidity position in the last 24 hours had significantly deteriorated,” Alan Schwartz, chief executive at Bear, said in a statement. “We took this important step to restore confidence in us in the marketplace, strengthen our liquidity and allow us to continue normal operations.
Hey Morgan,
How about that, Morgan almost goes under today and National City Bank puts themselves up for sale. Quite a day, eh?
Tom
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