Shareholders Rubber-Stamp Bear Selloff

Wall Street chieftains were well rewarded for risks they took in 2003-07

(NEWSER) - More than $3 billion was paid to the chief executives of the five biggest financial firms on Wall Street in the run-up to the credit crisis, Bloomberg reports. While supervising bad mortgage-related credit bets that eventually brought the financial system to its knees, Merrill Lynch’s Stanley O’Neal took in $172 million in 2003-07, while Bear Stearns’ James Cayne took in $161 million. More»

They claim hedge funds, Goldman Sachs invented bad news for profit

(NEWSER) - Bear Stearns' collapse and shotgun marriage to JP Morgan were sparked by little more than a rumor, Vanity Fair reports. True, the investment bank had stumbled—a $1.6 billion bailout of troubled funds hurt its image—but whispers of liquidity problems were false: Bear had $18 billion in cash reserves. Now former executives and the SEC want to know who killed the company. More»

Likely stockholder holdout drives spike

(NEWSER) - Bear Stearns shares jumped 23% today on hopes that stockholders will reject JPMorgan's bailout offer in favor of a higher offer, Bloomberg reports. The surge moved the price to nearly three times the current value of the fire-sale bid, which one major stockholder termed "derisory." "There's every incentive for shareholders to vote 'no' the first time," said one analyst. More»

(NEWSER) - Goldman Sachs and Morgan Stanley, the nation's last two major independent investment banks, have gotten permission to become bank holding companies, the Federal Reserve said tonight. A fundamental rearrangement of Wall Street, the move will allow them to create commercial banks, which would bolster their resources, while inviting increased regulation. It reflects the Fed's determination not to let Goldman and Morgan Stanley fail, the New York Times notes. More»

Paulson brokers twin public-private liquidity measures

(NEWSER) - Ten of the world's largest banks have formed a massive liquidity fund to mitigate the effects of the Lehman Brothers meltdown, reports the Financial Times. All the investment banks will be able to borrow up to a third of the $70 billion fund in order to reduce volatility and stay in business while Lehman is being wound down. They will also be able to borrow from the Fed under newly relaxed terms. More»