Inside the Meltdown

Inside the Meltdown - Inside the Meltdown Players Ben...

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Inside the Meltdown Players Ben Bernaike [Chairman Fed Reserve] & Henry Paulson [Sec. of Treasury] (came from Goldman Sachs) Tim Geitner [Now Sec. of Treasury] Bear Sterns, smallest investment on wall street, in Free Fall, running out of crash Worried about sub prime mortgages or toxic waste REPO every night Fed lends to JP Morgan and then they lend to Bear Fed Should let Bear go Under Bear Stuffed with toxic waste Found Billions in Sub prime and credit default swaps Systemic Risk – interconnected to other banks Risk to financial system Bear bought by JP Morgan for 2$ per share, Fed lent JP Morgan 30 Billion Dollar Dow rate In 7 days Bear Sterns was gone Moral Hazard – if you bail someone out from a problem they themselves caused, what incentive will they have next time to making the same mistake Nationalize Fannie and Freddie Lehman Brothers in trouble
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Inside the Meltdown - Inside the Meltdown Players Ben...

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