Results tagged “meltdown”

With the year anniversary of Lehman Brothers' collapse—and the subsequent global economic meltdown—approaching (September 15, 2008 is when Lehman filed for bankruptcy), there are plenty of stories from ex-employees. The Post says "a number of former Lehman employees in its fixed-income, emerging markets and other banking areas will be heading to various watering holes and clubs near Lehman's former Midtown headquarters on Sept. 15, for events that promise to be equal parts networking, reminiscing and working to erase that terrible chapter of their careers"—so consider that a warning! A former mortgage securities broker now admits to the NY Times, "I have blood on my hands," but thinks others are more responsible for the downfall ("regulators, senior executives, rival firms and traders who believed that their elaborate computer algorithms insulated them from risk"). And the Daily News notes that Famous Famiglia pizzeria, right near Lehman's headquarters, had to lay off five of 27 employees.

It's the New York banking equivalent of the Enron meltdown: Bear Stearns has agreed to sell itself to JP Morgan Chase at a fire sale price. When Bear Stearns' 14,000 employees left work Friday afternoon, the bank's stock had already plunged almost 50% in value, closing at $30 a share. But today they found out something much, much, much worse: their company has been purchased for a piddling $2 a share. That's $236MM for a company that was "worth" $3.54 billion on Friday. That's a 93% discount on Friday's closing price, and a 99% discount off January 2007's price of $170/share. Given that Bear Stearns' midtown headquarters had been valued as high as $1.5 billion, the firm's liabilities must have been enormous.