Danny Schechter - ColdType

as collateral to obtain overnight loans through “repurchase
agreements” in the so-called “repo” markets.
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Their ridiculously high leverage, and early, and then, overinvestment
in junk mortgage-backed securities, played a role in
the loss of confidence Bear Stearns encountered. Others blame
the public for taking out mortgages they couldn’t afford.
There was more to the story. There were forces at work here
that suggest illegal activities on a number of levels.
The firm has always pictured itself as small and feisty, and
in earlier Wall Street crises it pissed off competitors by not
doing what others felt was its duty. Reason magazine explains
why some on the street hoped for its fall.
According to this theory:
Bear was selected for punishment by the Wall Street colleagues
it had snubbed 10 years earlier (among them future
Treasury Secretary Henry Paulson, who was then working at
Goldman Sachs) by declining to join a team assembled by the
Federal Reserve to bail out the broken LTCM hedge fund.”
The company was presented in macho terms by an anonymous
executive:
On Wall Street, like on the playground when you’re a kid, reputation
is everything. You’ve got to fight to earn it, but once
you earn it, it’s yours to keep. We’d been around for 85 years
and we’d been through our battles. We’d gotten beaten up,
we’d grown tough, and we’d survived. We weren’t the biggest
kid on the block, but we weren’t getting kicked around
by the playground bully, either.
Their final crisis began when two Bear Stearns hedge fund
managers were arrested for fraud – the FBI found emails in
which they admitted selling worthless securities to the public
while at the same time dumping their own shares.
But there was something else going on – even the suggestion
that Bear was targeted and deliberately brought down. I