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Contents contributed and discussions participated by Liron Danovich

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Liron Danovich

How To Prevent the Next Financial Crisis - CBS MoneyWatch.com - 0 views

moneywatch.bnet.com/...185

shared by Liron Danovich on 12 Jan 11 - No Cached
  • Understanding what went wrong is important because it provides a guide to the best types of legislative and regulatory responses to use to minimize the chances of this happening again
  • In assessing the causes of this crisis, one clear culprit was the failure of regulators and market participants alike to fully appreciate the strength of the amplifying mechanisms that were built into our financial system.
  • At its most fundamental level, this crisis was caused by the rapid growth of the so-called shadow banking system over the past few decades and its remarkable collapse over the past two years
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  • So what should we do try to prevent this from happening again? Fixing these incentive problems is certainly a start, as is bringing the shadow banking system under the same regulatory umbrella as the traditional system
  • limiting leverage ratios (through higher capital requirements),
  • We also need to make sure that financial firms are not too big or too interconnected to fail.
  • we need to have the plans and the legal authority in place to deal with insolvent financial institutions, something that was very much needed but missing in the present crisis
  • we need much more transparency in these markets and in the assets that are traded
  • All financial transactions should either pass through organized exchanges, or be subject to some sort of strict reporting requirements to regulators.
  • Liron Danovich on 12 Jan 11
     
    Things that can be done in order to try to prevent a fainancial crisis from happening again- By Mark Thoma a macroeconomist and time-series econometrician at the University of Oregon.
Liron Danovich

Bank of America given $138bn rescue package | Business | guardian.co.uk - 0 views

www.guardian.co.uk/...bank-of-america-20bn-rescue

shared by Liron Danovich on 09 Jan 11 - Cached
  • BoA, which received $25bn after buying the ailing investment bank Merrill Lynch in September, will take the money from the controversial $700bn troubled asset relief programme (Tarp) agreed by Washington at the end of last year
Liron Danovich

JP Morgan profits from the global financial crisis with $10billion cash call | Mail Online - 0 views

www.dailymail.co.uk/...risis-10billion-cash-call.html

shared by Liron Danovich on 09 Jan 11 - No Cached
  • The Washington Mutual deal is the latest move by JP Morgan to profit from the global financial crisis.
  • The firm also gobbled up Bear Sterns, the investment bank, in March.
  • The Washington Mutual collapse was triggered by a massive wave of withdrawals during recent days
Liron Danovich

Global Economic Crisis » Goldman Sachs, America's Unofficial Welfare Queen? - 1 views

www.globaleconomiccrisis.com/...304

shared by Liron Danovich on 09 Jan 11 - No Cached
  • essential component in the survival of this illustrious firm is missing from the most recent quarterly report; specifically, the lifeline to Goldman Sachs that runs through AIG. For it is clear that without that lifeline, there would be no Goldman Sachs.
  • If Goldman Sachs were not the recipient of AIG pass through money in the last quarter of 2008, it is clear that this firm would be facing the serious prospect of liquidation
  • Liron Danovich on 09 Jan 11
     
    Successful investment banks - Goldman Sachs
Liron Danovich

The Fall of Bear Stearns: A Quickie Guide -- Daily Intel - 2 views

nymag.com/...ckie_guide_to_the_fall_of.html

shared by Liron Danovich on 09 Jan 11 - No Cached
  • June 2007: Bear Stearns ponies up $3.2 billion to bail out two hedge funds created to invest in subprime mortgages
  • March 10–13, 2008: Amid rumors that Bear is teetering and has liquidity problems — and the small matter of $46 billion in mortgages and other questionable "assets
  • December 2007: Bear Stearns posts fourth-quarter loss of $854 million on massive mortgage-related write-downs, the first quarterly loss in its 85-year history.
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  • • July 2007: Bear Stearns writes to inform clients that the two hedge funds now contain "very little" or "effectively no value" for investors. By August, both funds file for bankruptcy.
  • Friday night, March 13–14, 2008: In a desperate scramble to avoid having no funds to operate its businesses, Bear executives pull an all-nighter trying to figure out how "fix this thing."
  • March 16–17, 2008: On late Sunday, after forcing a bunch of bankers to work over the weekend, JPMorgan decides it will buy Bear Stearns so that BSC can avoid bankruptcy, but only with the Fed's backing.
Liron Danovich

The secret history of Bear Stearns' collapse - Mar. 3, 2009 - 0 views

money.cnn.com/...index.htm

shared by Liron Danovich on 09 Jan 11 - Cached
  • February 2007 had been a very difficult month for Cioffi's two hedge funds. The High-Grade Fund had reported a gross return of 1.5% - respectable, to be sure - but the Enhanced Leverage Fund had lost 0.08%, the first time either fund had lost money since Cioffi started in 2003
  • Cioffi was concerned because he knew that actually the funds had closer to 60% of their money invested in subprime mortgages.
  • The High-Grade Fund lost 3.71% for the month. The Enhanced Leverage Fund lost 5.41%.
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  • After 40 months of positive returns, the sudden and sharp decline in the two hedge funds was new territory for Cioffi and Tannin
  • As the BSAM funds collapsed, Bear Stearns co-president Warren Spector suspected Cioffi and Tannin might need help
  • Liron Danovich on 09 Jan 11
     
    Exclusive book excerpt: Bestselling author William Cohan uncovers the inner workings of the misadventure that brought down Bear Stearns and foreshadowed the financial crisis to come.
Liron Danovich

How Lehman Brothers became Bankrupt? - AbhiSays.com - 0 views

abhisays.com/...-brothers-became-bankrupt.html

shared by Liron Danovich on 09 Jan 11 - No Cached
  • 15th Sept 2008 has become a black day in the history of financial market with US fourth-largest investment bank Lehman Brothers filing for bankruptcy
  • The firm does business in investment banking, equity and fixed-income sales, research and trading, investment management, private equity, and private banking
  • These days there is mortgage crisis in United States due to decline in prices of real-estates
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  • housing loans made by the bank to people with little support made these loans very risky, and when interest rates were raised by these banks, these borrowers could no more repay Lehman
  • One of the main reason for its downfall was its poor relations with top banks of United States
Liron Danovich

Banking crisis: Lehman Brothers files for bankruptcy protection | Business | guardian.c... - 0 views

www.guardian.co.uk/...lehmanbrothers.creditcrunch

shared by Liron Danovich on 09 Jan 11 - No Cached
  • it will file for Chapter 11 bankruptcy protection, making it the biggest victim so far of the credit crunch and sub-prime crisis.
  • The collapse of Lehman – one of the biggest financial shocks in years - puts tens of thousands of jobs around the world at risk, including over 4,000 in the City and another 1,000 in High Wycombe.
  • help to push the UK into recession
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  • failed to deter investors and trading partners from fleeing.
  • The collapse of Lehman sent traders rushing into government treasury bonds – seen as a safe haven in troubled times. The dollar fell against both the euro and the yen.
  • Liron Danovich on 09 Jan 11
     
    Failed investment banks- Lehman Brothers
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