Bear Stearns Collapse Timeline Essay Example for Free

Bear Stearns Collapse Timeline Essay This week five years ago, JP Morgan announced it would buy Wall Street rival Bear Stearns in a deal worth $2 a share – this ultimately rose to $10. Here, Financial News looks at the events in the run-up to the fall of the 85-year old independent investment bank. Financial News compiled the timeline from press releases, contemporary media reports and William D Cohan’s account of the collapse of the bank, ‘House of Cards’. May 21, 2007 After months of growing instability in the US sub-prime mortgage market, Bear Stearns chairman Alan ‘Ace’ Greenberg offers reassurances that the firm, heavily exposed to the market, is on top of things. â€Å"The sub-prime (issue) has been blown completely out of proportion,† he says, in comments reported by Dow Jones Newswires. Mid-June 2007 Serious problems become apparent at two Bear Sterns hedge funds with a high exposure to sub-prime mortgages. Investors in the High-Grade Structured Credit Strategies Enhanced Leverage Fund, which managed $600m, are informed that the fund has lost 23% of its value over the year to April, reports The Wall Street Journal. The fund begins a fire-sale to minimise exposures. After the failure of a mooted rescue plan involving support from lenders, a new rescue scheme is announced by Bear Stearns, which offers $3. 2bn for a bailout of a second fund the High Grade Structured Credit Fund. The bank previously had only $45m invested in this fund’s equity, according to William D Cohan in House of Cards’. Bear Stearns later says it is providing $1. 6bn to the fund rather than the original $3. 2bn, citing the sale of assets. A decision is made not to rescue the High-Grade Structured Credit Strategies Enhanced Leverage Fund, according to Cohan. August 3, 2007 Standard Poor’s downgrades the bank’s outlook to negative. The bank says that concerns over its situation are â€Å"unwarranted† as the hedge fund fallout represented â€Å"isolated incidents† and â€Å"by no means a broader indication† of the bank’s performance, according to The Wall Street Journal. August 5, 2007 Bear Stearns president and co-chief operating officer Warren Spector resigns from the bank. Alan Schwartz is confirmed as sole president. Days later, the Associated Press reports that the bank sends letters to clients reassuring them of its financial position. September 10, 2007 British billionaire Joseph Lewis expresses his confidence in the future of the bank by acquiring a 7% stake, becoming one of the largest shareholders. October 5, 2007 Federal prosecutors launch an investigation into the collapse of the Bear Stearns hedge funds. November/December 2007 Chief financial officer Sam Molinaro says that the bank has been â€Å"very conservative and aggressive† in its revaluations, according to Dow Jones Newswires. On December 10, MarketWatch reports that the bank has written down $1. 9bn related to mortgage exposure. January 8, 2008 Chief executive Jimmy Cayne steps down after widespread criticism of his hands-off response to the events of the previous year. He remains as chairman. He is replaced at the top by Alan Schwartz. In the same month, the bank announces the closure of a third fund, the Bear Stearns Asset Backed Securities Fund. Bloomberg reports that this fund has suffered a decline of 39% of its value over a year. February, 2008 Hedge fund Peloton Partners, run by Goldman alumnus Ron Beller, collapses following its exposure to asset-backed securities. March 2008 Carlyle Capital, a hedge fund based in Amsterdam, collapses as concerns over exposures to mortgages begin to multiply, causing a squeeze on lines of funding. By March 5, insurance premiums on Bear Stearns debt have risen from $50,000 per $10m of debt at the beginning of 2005 to $350,000 per $10m debt, according to William D Cohan. It soon reaches $700,000. Monday, March 10, 2008 The company’s stock falls 11% to its lowest level in five years following a Moody’s downgrade of portions of its mortgage bond holdings, writes Cohan. The bank denies rumours that it is in trouble. Investors look for ways to bet on further falls in the bank’s stock. Tuesday, March 11, 2008 ING Groep, the Dutch bank, cancels $500m of short-term funding for Bear Stearns, according to The Wall Street Journal, following an example set by Rabobank. According to a press release, the Federal Reserve announces an unprecedented lending facility in which collateral can be exchanged for funding, but the scheme cannot be accessed until March 27. In another important incident, cited by Cohen in ‘House of Cards’, Goldman Sachs refuses to stand in for Hayman Capital in a trade with Bear Stearns, suggesting hemorrhaging confidence among major financial players. Wednesday. March 12, 2008 Overnight markets for funding begin to dry up, while institutions continue to deny short-term lending to Bear Stearns. Hedge funds and other investors continue in their attempts to extract their money from Bear Stearns, which is rapidly approaching a funding crisis. Thursday, March 13, 2008. As customers continue to withdraw funds, the Securities and Exchange Commission and the New York Federal Reserve begin discussions on the crisis. In a meeting on Thursday night, reported by Cohen, it is discovered that outgoings at the firm can no longer be maintained, with the firm effectively running out of cash during the afternoon. Lawyers are summoned to discuss the options for bankruptcy, while a deal with JP Morgan Chase is sought. After late night negotiations, JP Morgan agrees in conjunction with the Federal Reserve Bank of New York that it will provide secured funding to Bear Sterns for an initial period of up to 28 days. Friday, March 14, 2008 The cobbled-together deal fails to assuage the markets. Investors continue to pull money from the bank over the course of the day. By the evening, it is clear that a solution will have to be devised over the weekend if the bank is to survive. Saturday, March 15- Sunday, March 16, 2008 JP Morgan says it cannot do a deal without support from the Federal Reserve, due to the large number of toxic securities on the books of Bear Stearns. In response, the Fed approves a loan of $30bn saying that it is necessary to avoid â€Å"serious disruptions in the financial markets†. JP Morgan offers just $2 per share for the bank, a large loss for those whose stock was worth $30 on Friday, $60 the week before and over $150 a year before. Bondholders will be rescued by the deal, which is accepted by the board of Bear Stearns on Sunday morning. Wrangles with JP Morgan over a contract situation which potentially leaves the bank liable for funding Bear Stearns without claiming full ownership result in brinkmanship from Bear Sterns. A final price of $10 per share is agreed, with a value of $1. 45bn attached to the equity. March 25 Bear Stearns chief executive Jimmy Cayne and his wife sell 5. 66 million shares in the bank for $61. 34m, which, according to Cohan, represented a $1bn loss on the bank’s stock. May 29 The final Bear Stearns shareholder meeting takes place, at which former CEO Cayne speaks of his sadness at the firm’s demise, according to The Wall Street Journal, citing guests present.

Friedrich Engels Essays -- Biography Communism engels Essays

Friedrich Engels During the time of the industrial era, there were many people upset over the manner in which the nations were being run. They were upset with the idea of capitol gain and how it was affecting people’s actions. They saw this era causing people to exploit each other with the intent of monetary gain. Those that were already part of the higher ranking class, the richer, would see reason to force the lower class, the working man, to spend his life in the new factories. He would be bullied into risking life and limb at the monstrous machines while hardly earning a penny. The working man suffered because the richer man owned the factory and consumed all the profits himself. Some men, however, saw a solution as well as the problem. They thought that if the power could be taken out of the hands of the strong and power hungry, then the working class would realize the rights they had all along. The constant struggle for power would be eliminated and so society would become better . Two of these men were Karl Marx and Friedrich Engels. Marx had received all the recognition while Engels has been shunted off the pages of history. He did, however, still have an impact on the development of communism. Friedrich Engels was born on November 28, 1820 in Barmen, Germany. Engels began to learn the family business rather early, being the oldest son of an auspicious industrialist.1 Engels studied commerce and worked for his father as an office clerk from 1837 to 1841. But this was not his only focus. He also tried his hand at poetry as did his future friend Marx. Like Marx, his attempts did not gain him any recognition in the literary world. By his eighteenth year he had sworn off poetry all together. This was... ...e story of his life. Ann Arbor Paperbacks, 1962. 3. Mehring, Franz. Karl Marx: The story of his life. Ann Arbor Paperbacks, 1962. 4. Modern History Sourcebook: Friederich Engels: Industrial Manchester, 1844 http://www.fordham.edu/halsall/mod/1844engels.html 5. Anderson, Thornton. Masters of Russian Marxism. New York: Appelton-Century- Crofts, 1963. 6. BIOGRAPHICAL ARTICLE ON ENGELS, Brockhaus' Konversations-Lexikon. Vol. 6, 14th ed., Leipzig and Vienna, 1893. Translated into English by Progress Publishers 7. BIOGRAPHICAL ARTICLE ON ENGELS, Brockhaus' Konversations-Lexikon. Vol. 6, 14th ed., Leipzig and Vienna, 1893. Translated into English by Progress Publishers 8. Marx and Engels. Reminiscences of Marx and Engels. Moscow: Foreign Lauguages Publishing House.

Digby Annual Report

[pic] C55847 – Digby Annual Report By Yan Lang, Ching-Hsiang Lin, Shu Ou-Yang, Nuo Xu Shareholder Letter To Our Shareholder, Customers, and Employees: The past eight years have marked an extraordinary level of progress for Digby Electric Sensors and its shareholders. In the past eight years, the company was able to turn its stocks from $34. 25 per share into $45. 77, plus issuing a total of $10 dividends per share along the way. While this level of performance is very rarely rivaled by any type of investment, our company is most proud of the sustainable within the environment and continues growth rate in the electric sensor industry.Eight years ago, our management team touted the importance of the following four guiding principles that helped to make Digby’s success today: 1. Cost leadership: By bringing labor and raw material costs down years ahead of the competition, our company has able to enjoy the prevailing market price and generating excess profits. 2. Low price products: By taking aggressive actions early to bring down the costs of production, our company has been able to output the highest quality line of electric sensors and offer low selling price in the industry. 3.Aggressive marketing: Aggressive spending in marketing every year has helped the company to gain customer awareness in preparation for eventual lower per unit production costs. This immediately helped Digby to sales in high volumes. 4. Board diversified products: In each segment, our company keeps trying to become the product leader. We spent heavily in TQM in order to reduce R&D cycle also increase market demand. The level of return on investments our company has been able to deliver by following the four listed principles is not only a tribute to our past success, but also serves as a source of optimism for Digby’s future.In the following pages you will find more detailed information on the dominate positioning our company holds in the industry as well as adjustment s to be made to further increase shareholder value. Best Regards, Digby Corp. Corporation Profile: Overall about the company Lang, Yan- Chief Executive Office and Chief Operations Officer established Digby, Inc. on January 22nd, 2013. The company’s headquarters are located in center Arlington, TX. Digby, Corp. is currently one of the leading manufacturers of high quality sensor chips in the United States.Yan founded the company on the premise that it would successfully produce and sell sensors of highest quality and reliability to various segments of consumers with all type of needs, such as those for newness and affordability, and would continue to place a strong focus on research and innovation to persistently cater to these changing needs and maintain a substantial amount of market share in the growing market. Digby’s product line includes Daze, Dell, Dixie, Dot and Dune, which are sold online, as well as through local technology retailers nationwide.Digby has provi ded quality products for many successful applications and has helped many companies achieve their project objectives with the highest standards of quality and reliability. Our Mission & Vision â€Å"At Digby, Corp. , we are dedicated to providing optimal sensors for our customer’s needs and wants. Our guiding objectives are customer satisfaction and continuous improvement. Our overall goal is to consistently strive to deliver the highest quality products and technology and offer competitive pricing in each and every target segment of users. Culture â€Å"We want employees to be proud of the work they do, and to remember that they are part of Digby, Corp. committed to providing excellent service and exceptional products to the public,† Core Values Integrity — Build  mutual trust through ethical and responsible thoughts, words, and actions. Teamwork — Collaborate, share information openly, leverage our diversity, be transparent. Speak up, debate, and dis agree, but decide, commit to the decision, and make it a success. Winning Mindset — Be positive, adaptable, and competitive.Deliver results to ensure the success of Altera and our customers. Accountability — Define, own, and answer to your area of responsibility. Innovation — Think forward, take calculated risks, be agents of change, adapt quickly. Create a learning environment where we develop our skills and invest in our employees. Executive Leader [pic] [pic] [pic] [pic] Strategies: Digby, Corp. takes pride as a broad cost leadership and broad differentiation strategies to develop competitive advantages in the sensor industry.In the past eight years, Digby sensors were designed to fit a wider array of preferences, such as those for a brand new product, known as the Traditional segment; a premium priced product that offers both high performance and desirable size, known as the High End segment; an extraordinary performing product, known as the High Performance segment; a smaller sized product, known as Size segment; and finally, a lower priced product, which is referred to as the Low End segment.However, once the company executives began to recognize which stood out amongst the rest as the most promising for increasing revenues and producing maximum returns, Digby’s overall strategy was shifted to emphasize only on the Traditional, Performance, and Low End segments and in improving existing products in these categories while also creating new. In the first five years, we invest generous amount in TQM in order to reduce material, labor and administrative costs, shorten the length of time required for R&D projects to complete and increase demand for the product line enable for us to make more profits in short term.Further, we believes that wise use of resources and increasing efficiency are key in building long term success and that pinpointing the most effective outlets for accessing target consumers and utilizing a large marketing and promotional budget are essential for creating and maintaining awareness of Digby, Corp. and its products. Financial Highlights: (In Thousands of Dollars, except Per Share Data) | | | |Revenue | |Net Cash Flow | |Operating Activities | |Closing Financial Position | |Total Equity | |Per Common Share | |Market Value | |Financial Ratios | |% ROS |13. | |Cost leadership strategy |Low market share | |Board diversified products |Less diversity | |Strong brand equity |Low customer awareness and accessibility | |Strong financial position |High stock price | |Competitive wages and profit sharing | | |Loyalty customers | | |Opportunities |Threats | |Emerging markets and expansion abroad |Severe competition | |Innovation |Cheaper technology | |Product and services expansion |Reduction in demand from economic regression | |Increase customer satisfaction scores |Lower cost competitors or imports. |Aggressive spending in advertisement. |Maturing categories, products, or services | Risk& Uncertainty: Digby faces the uncertainty and risks of the competitive market in the sensor industry and the reduction in demand from economic regression, the top management team still dedicated to increase the market share and the stock price in the sensor industry. These results emphasize the role of uncertainty as a determinant of investment spending, and suggest that policies that reduce volatility may lower the required cost of capital. By using SWOT analysis, our management team figures out that add value to our products and decrease our product’s weakness.Digby using the cost leadership strategy to attract the target customers and also tries to decrease the labor and raw material costs, relative to that of competitors. Although cost leadership implies keeping costs as low as possible, our products and services still have qualities and features that customer find acceptable. On the other hand, our company keeps trying to become the product leader in each segment, w e spent heavily investment in the TQM in order to reduce R&D cycle also increase market demand. Future of the company: Digby is a company has lots of growing potential and energy. In the past eight years, we have just set a strong foundation for our company’s future grows. We will keep expanding its manufacture plants and focusing on board diversified products that meet customers’ need.With the â€Å"AAA† investment rating, we will invest heavily with low interest payments in R&D and TQM departments, so we would keep its low cost advantage within the industry. In the next five years, our targeted market share is 25%, and our targeted stock price is $65 with an overall $15 per share dividend payment. In the near future, we will start to use our best effort to develop, to expand, and to grow. And then, we will become the industry leader and enjoy the profits that we made. ———————– Lang, Yan Founder Chief Exec utive Officer Chief Operations Officer Lin, Ching-Hsiang Vice President of Marketing and Sales Shu, Ou-yang Chief Financial Officer Xu, Nuo Vice President of Human Resources

The Constitution Of The United States - 1632 Words

Emily Alexander Pima Community College March 9, 2015 The Constitution of the United States After gaining independence from Britain, America was faced with the challenge of creating a new government for the people of the American colonies. The Founding Fathers first created the Articles of Confederation but after much criticism the Founding Fathers met again and created the Constitution of the United States. The Founding Fathers wanted to form a government that was unlike the British government they broke away from. They set up a government that had checks and balances so that one government branch would not grow too powerful and take over. A federal government and state governments were establish to satisfy the needs†¦show more content†¦The Founding Fathers had no right to draft the Constitution. They were delegates that were sent to revise the Articles of confederation. â€Å"Though authorized only to propose amendments to the article, the convention resolved to scrap them entirely and propose a brand new constitution† (Currie, 1). The Constitution should not have had the effect that it did. It is now the document that the entire United States runs on. The constitution should have been looked at as a political philosophy, an idea of what a government should look like. Had the situation been different the constitution would have been seen as just a philosophy but because the United States had just gained its independence from Britain and was in desperate need of some form of government the constitution took over. The constitution was not created without much debate. Founding Father faced the debate of how much power the national government had and how much power the state government had. The Federalist wanted a strong national government but the Anti-Federalist wanted the states to have power. An agreement was reached and the federal government was given the sole power of foreign affairs and coining money. Today states are able to make laws based off of what their citizens and representatives see fit; for example some states such as in Arizona allow for the death penalty whereas other states have ruled it to be illegal. The United States government was formed in a way that