Bye bye Wachovia.......
I don't need more cowbell dammit!
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Each investment bank had their share of subprime related losses, it just happened that Morgan Stanley and Goldman Sachs weren't as heavily invested into them as much as Bear Stearns, Lehman, and Merrill.
But as rumors were floating around, the hedge funds and naked short sellers decided to capitalize on those rumors, whether true or not, and one by one started slamming each of their stocks. Eventually their stocks were so low that they had no choice but to collapse or sell themselves. It wasn't just the investment banks as every financial stock was getting dragged down by short sellers. The strong banks like Bank of America, Jp Morgan, and Wells Fargo all had their stocks down significantly. BOFA's shares plunged to $15 a share a couple months back.
When those 3 investment banks went down, Morgan and Goldman were still standing. They were still hurting, but like I said, they weren't as heavily invested in subprime as the others. I don't follow Morgan Stanley but Goldman Sachs posted good numbers for several months (and was considered best of breed by many analysts) until about a month ago they posted a loss. Their stock dropped from $170 a share to $108, and would still be declining had the sec not implement the "no naked short selling rule" and the 2 investment banks asked the Fed for help by turning into a traditional bank. And having Warren Buffet's name as an investor in your stock certainly doesn't hurt either.
But as rumors were floating around, the hedge funds and naked short sellers decided to capitalize on those rumors, whether true or not, and one by one started slamming each of their stocks. Eventually their stocks were so low that they had no choice but to collapse or sell themselves. It wasn't just the investment banks as every financial stock was getting dragged down by short sellers. The strong banks like Bank of America, Jp Morgan, and Wells Fargo all had their stocks down significantly. BOFA's shares plunged to $15 a share a couple months back.
When those 3 investment banks went down, Morgan and Goldman were still standing. They were still hurting, but like I said, they weren't as heavily invested in subprime as the others. I don't follow Morgan Stanley but Goldman Sachs posted good numbers for several months (and was considered best of breed by many analysts) until about a month ago they posted a loss. Their stock dropped from $170 a share to $108, and would still be declining had the sec not implement the "no naked short selling rule" and the 2 investment banks asked the Fed for help by turning into a traditional bank. And having Warren Buffet's name as an investor in your stock certainly doesn't hurt either.
yes but I'm just telling clsmooth that hedge funds and naked short sellers had a role to play in the collapse of financial companies ever since the uptick rule was repealed by the SEC.
There's a reason they put a temporary ban on short selling financial stocks because of the turmoil it caused by punishing financials based on unfounded rumors.
There's a reason they put a temporary ban on short selling financial stocks because of the turmoil it caused by punishing financials based on unfounded rumors.
I don't need more cowbell dammit!
iTrader: (5)
Joined: Jun 2003
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From: Equally as important as Walter
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yes but I'm just telling clsmooth that hedge funds and naked short sellers had a role to play in the collapse of financial companies ever since the uptick rule was repealed by the SEC.
There's a reason they put a temporary ban on short selling financial stocks because of the turmoil it caused by punishing financials based on unfounded rumors.
There's a reason they put a temporary ban on short selling financial stocks because of the turmoil it caused by punishing financials based on unfounded rumors.
I don't need more cowbell dammit!
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From: Equally as important as Walter
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thanks for the reply+info, Turn. there's no denying short sales+panic were killing all the banks, not just the i-banks. but i was little skeptical ever since reports of Goldman's better than expected earnings were being passed around a few months ago. i didn't have any idea they might have to implement the massive restructuring that they did, but people on their radar have been saying for a while (literally like 2 years ago) they knew big changes were imminent. i didn't pay much attention as some others i know cuz most of it was going over my head, but i absorbed enough to be surprised and not so surprised when Goldman had to ask for the bailout.
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