Bear Stearns

Taking Bear Stearns and Lehman Brothers out of the commercial paper market is like taking the umpires off the field in a Little League game.

Someone is actually holding Jim Cramer responsible for some of the advice he has given, and also for the fact that CNBC has "morphed" into an entertainment channel.

Banks (and brokerage firms) that own mortgage backed securities have been required — since November 2007 — to use mark to market accounting on these securities. Coincidentally, this was just around the time these mortgage securities started dropping precipitously in value. 2007 saw many mortgage firms get wiped out, and brokerage firms and banks holding these assets started realizing the volatility of these assets.

Warren Buffett writes an annual letter to the shareholders of Berkshire Hathaway each year.  If you've never read them, you really ought to.  They are priceless gems.  Not a laugh a minute, but an interesting observation on what's happening. (…)

What is left in the governments bag of tricks to get the banks back on track?  One topic that I wrote about — 5 months ago — has popped up this past week with more and more frequency.  We are finally starting to hear more and more chatter about relaxing "Mark to the market" regulations. (…)

Don't worry about "why" your investment is falling.
Focus on "what" instead.  What is happening now. (…)

Quick history lesson: Mark-to-the-Market was a practice originally begun by futures and commodity traders in the 19th century.  Essentially, mark-to-the-market means your holdings must be "priced" every night…at the price they can be sold at. (…)

That was the headline I found over at CBS Marketwatch.  As usual, the news media is whipping (anyone who will read) into a frenzy about Lehman Brothers.  More news may be forthcoming about Lehman — between the time I finish writing this and the time you read this. (…)

"Mr. Valentine has set the price!"
Or, in this case Mr. Bernanke sets the price. (…)

In the coming months and years, you will hear more publicly traded companies than ever before discussing the idea of GOING PRIVATE.  Even with the mortgage mess, there is STILL access to capital. (…)

Oh boy, these kinds of headlines are never good.
Two former Bear Stearns portfolio managers were arrested this week, not because they did a poor job of managing money. (…)

There was an article distributed nationwide, written by the Associated Press, and carried locally in the Asbury Park Press on March 22, 2008. (…)

All these firms hold the same investments.
There is STILL considerable risk in the group.
Why did this happen to just Bear Stearns? (…)

UPDATE: Sunday evening, 03/16/2008: Bear Stearns to be acquired by JPMorgan Chase for $2.00 in stock swap deal.
That is NOT a typo!
The stock closed at $30 on Friday. On Thursday, it was $57.00. (…)

The news surrounding Bear Stearns on Friday morning was not good! There are several important elements to this story. (…)

The big reason why the market fell apart this summer was because the financial stocks — the brokerage firms in particular — really struggled. (…)