Wednesday, Nov 14, 2007
Another result you may have missed
Bloomberg: Bear Stearns Cuts Subprime Assets, Limits Writedown
"Bear Stearns Cos., after posting its biggest earnings decline in more than a decade, reduced subprime holdings by 50 percent in the past two months, limiting writedowns in the fourth quarter to $1.2 billion". "Bear reduced its CDO holdings to $884 million as of Nov. 9 from $2.07 billion at the end of August".
Posted by alan @ 05:45 PM (515 views) Add Comment
6 Comments
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1. tyrellcorporation said...
Back to work everyone, it's all been a bad dream!
I just can't believe this has all been swept under the carpet, surely this debt chasm hasn't simply been filled?!?
2. inbreda said...
A race to the bottom for CDOs will lead to a race to the bottom for houses.
Nobody wants to own the debt. It's all about damage limitation SELL SELL SELL!!!
Goodbye BTL!!
3. Stevie Dee said...
Amazing, bankers are clever really aren't they.. no one seriously thought these banks were going to suffer.. did they? I see BS are bringing in someone from GS, all very cosy indeed.
4. shipbuilder said...
It's all just easy come, easy go, though, isn't it? Aren't these write-offs just money that's been created from nowhere as part of the money supply increase in the last number of years? They don't represent any real wealth in the first place, so really what does it matter if the money disappears?
Am I missing something? Say I was able to create £1M in my bank account by just typing in the numbers. I could go out and spend that money, because it would be as real as any other numbers on a computer. There's more money in the world. People would think I was rich. But if someone else went back in and reduced the amount, I lose out because people don't think i'm rich anymore, but what's really changed in the world? I haven't made anyone else poor, I didn't steal from anyone. Isn't that the modern financial system?
5. shipbuilder said...
What i'm getting at, I think, is that the only downside is that that money would not have entered the economy, so the economy can't 'grow' as much.
If we didn't have a system where lack of growth=pissed off shareholders=job cuts, what would be the difference to the world?
Wouldn't it be more sensible to have a fixed amount of money, so that one company grows at another's expense, but the overall economy stays the same and doesn't end up increasing like bacteria?
I know youse know all this already and we've seen the films on youtube - i'm just thinking out loud.
6. Stevie Dee said...
To be honest shipbuilder.. i've been watching what has been written with great interest, it was only a couple of weeks back that people were talking about this 100's of billions in terms write downs for the banks. And I said then, that their may be a twist in the tale. What ever is going to happen next is anyones guess. Unless of course you are a well connected banker.
It's like an act on stage.. where the star performer hides behind the curtain.. his reasoning "to keep the audience guessing or captivated".
I don't profess to be an expert. But I will say this, ultimately whatever happens in the future, "joe public" will pay the price.