Bear Stern Case Summary

Words: 422
Pages: 2

On July 31st Bear Sterns liquidates funds that were backed by subprime mortgage loans, and shareholders begin to sale their shares which drops Bear Sterns stocks down to $2.00 a share. Within a couple of days of this massive event, several mortgage companies who had issued subprime loans file for bankruptcy protection. The stock market begins to crash as shareholders continue to sale shares. By the end of 2007, the US was already in a recession. The Federal Reserve comes to the decision to guarantee funds for Bear Sterns so that JP Morgan can purchase their assets. Federal regulators begin to take over several large banks and investment companies, which included Fannie Mae and Freddie Mac, who at this point own half of all subprime loans. Bank