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03-16-2008, 01:38 AM #1
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UK tycoon Joe Lewis loses $800m on Wall Street
UK tycoon Joe Lewis loses $800m on Wall Street
Bear Stearns on brink of break-up
Dominic Rushe, Iain Dey and David Smith
JOE LEWIS, the secretive British billionaire, has lost an estimated $800m in the collapse of the American investment bank Bear Stearns.
The 71-year-old currency trading tycoon, who runs his empire from the Bahamas, holds almost 10% of the bank's shares. Bear’s shares fell 40% on Friday to $27, after it secured a 28-day credit lifeline to stave off collapse.
Lewis began building a stake in Bear last September, when the shares were changing hands for more than $100.
The huge paper losses could force Lewis to sell out of some of his other positions, according to traders, in order to meet margin calls from his lending banks.
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Bear Stearns stands on the brink of collapse or break-up this weekend. The bank’s woes come as Wall Street braces itself for another week of pain.
Some of America’s biggest financial institutions are set to announce first-quarter figures showing fresh losses and write-downs of billions of dollars.
The disclosures come amid desperate attempts to bail out Bear Stearns, which secured a 28-day lifeline on Friday to stave off collapse. That would have caused a sale of Bear’s $42 billion (£21 billion) of loans and $176 billion of securities that could have triggered a meltdown in the financial markets.
On a Friday conference call, Bear’s chief executive Alan Schwartz said the bank was considering a full range of options - a statement many took to mean the bank is on the block. Lazards is advising Bear on its options.
JP Morgan Chase has stepped in alongside the Federal Reserve Bank of New York to provide emergency funding.
Jamie Dimon, JP Morgan chief executive, is interested in Bear’s prime brokerage business and parts of its mortgage operations, according to sources.
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03-16-2008, 01:40 AM #2
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Didn't China buy stake in Bear Stearns and was looking to buy more stock?
I wonder how the Chinese will view their loss - perhaps in the same way as they view the declining value of their dollar holdings? Or will this deter China and other foreign investors shoring up US financial institutions?
Damian, Eastbourne,
Bears has exposure to $176bn worth of mortgage backed securities. Sub-prime mortgage backed securities with AAA ratings are currently worth 53p to the dollar. the value of prime mortgage backed securities have also collapsed (it triggered the demise of a Carlyle hedge fund last week). If Bears markets its mortgage backed securities on a "mark to market" basis, its so dead in the water, the write downs will run into tens of billions.
tony hewitt, Los Angeles, USA
This is the George Bush legacy. Why is he not held accountable for anything? All of his buddies are now getting a bail out. This is worse than a banana republic. This is totally an abuse of power and theft. Sell dollars now before they are totally worthless.
Luca Ponti, Barcelona, Espana
Gosh, if you ride a cloud of greed, making and bundling home mortgage loans for people that have demonstrated that they probably won't pay them back. Then the Government will open a credit kine for you. Wow, What a concept.
Silverback, Naples,, FL.
Morgan Stanley may be next.
Yo, Miami, FL
Who'd want to be a billionaire?Obviously not Joe Lewis.How will cutting rates by a full 1% calm the markets?Its like giving a shaking alcoholic a full bottle of whisky.It will calm him down for a few hours,then what,another bottle.
stephen hulton, eure, france
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03-16-2008, 02:05 AM #3
And what Presidential canidate said this was on the horizon?
Chalk up another for Ron.
Now I can't wait to hear Rush.
Update: Freeloading Illegal Alien Continues to Taunt U.S....
03-28-2024, 01:10 PM in illegal immigration News Stories & Reports