How Did The Bear Steearns Meltdown
The Frontline Documentary Meltdown recounts that tragic downfall of Bear Stearns one of America’s prominent Investment Banking Institution. It was a fall that was heard and felt globally and one that caused the Global Economic Crisis in 2008 that threw the country in a severe recession that would take the nation years to recover. The economic downturn affected many lives and many loses were incurred by both in financial institution, traders and not to mention individual investors. Bear Stearns was a New York based investment bank, brokerage firm and trading house that was established in 1923 by Joseph Bear, Robert Stearns and Harold Mayer. Bears Stearns was a part of the fabric of the American Culture of institution banking
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It’s a look at the Political, Economic, Social and Technological forces that impacts our environments and the two most forces that affected the Bear Stearns meltdown were the Political and Economic forces. Political forces deals with how the government intervenes in the economy in terms of taxes, trade, restrictions, policies and procedures. Political factors or forces could also imply political stability and its influence on the economy. In Bear Stearns case this was evident in The Department of Treasury intervention and attempt to offset a disaster of that would causes a global economic crisis. Economic forces includes the interest rates, exchange rates, inflation, recession which all affects the upturn or down turn of the economy. For Bear Stearns the housing market was on a high for both the buyer and the seller. There were many mortgage lending institution that were approving mortgages at a rate that were higher than they have at any time before. The speculation that this would continue to increase and be beneficial for the economy turned out to be not as so accurate. The Market took a downturn and stocks began to fall and as stocks began to fall investors began to pull out leaving Bear Stearns financially depleted hence losing their credibility with investors, the market and other financial
It’s a look at the Political, Economic, Social and Technological forces that impacts our environments and the two most forces that affected the Bear Stearns meltdown were the Political and Economic forces. Political forces deals with how the government intervenes in the economy in terms of taxes, trade, restrictions, policies and procedures. Political factors or forces could also imply political stability and its influence on the economy. In Bear Stearns case this was evident in The Department of Treasury intervention and attempt to offset a disaster of that would causes a global economic crisis. Economic forces includes the interest rates, exchange rates, inflation, recession which all affects the upturn or down turn of the economy. For Bear Stearns the housing market was on a high for both the buyer and the seller. There were many mortgage lending institution that were approving mortgages at a rate that were higher than they have at any time before. The speculation that this would continue to increase and be beneficial for the economy turned out to be not as so accurate. The Market took a downturn and stocks began to fall and as stocks began to fall investors began to pull out leaving Bear Stearns financially depleted hence losing their credibility with investors, the market and other financial