Rescued by Vultures: Central Banks Are Bailing Out the Big Banks, Just Like in 2008

Rescued by Vultures: Central Banks Are Bailing Out the Big Banks, Just Like in 2008

By Nomi Prins – Editor, Inside Wall Street with Nomi Prins

In 2008, I was living in New York, just 20 blocks away from Bear Stearns.

I had left Bear to join Goldman Sachs in 2000, but I still had many contacts from those days. When Bear went under in March 2008, the conversations with old colleagues were intense.

What happened? Who knew? And how could a few bad positions take down a company that had connected us together?

At the crux of Bear’s demise was a book of over leveraged subprime assets.

That means Bear had borrowed way too much money to buy what turned out to be toxic assets. As Margot Robbie’s character put it in the movie The Big Short, “Whenever you hear the word subprime, think s**t.”

The managers and traders of those assets were holding on to hope. They hoped that the price would recover fast enough, so they could sell them. They knew they might have to sell them at a loss. But they never imagined they’d take the whole firm down in the process.

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