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Spector Pays the Price (Literally)
Instant Karma Department:
When Bear Stearns issued $2.25 billion of five-year bonds on Monday, the day it said a third proprietary hedge fund was in trouble, it had to swallow an interest rate 245 basis points over Treasuries.
That's a premium of 120 basis points over typical single-A corporate bond yields.
On $2.25 billion of bonds, that adds another $27 million in interest payments per year, or an extra $135 million in total.
And that, weirdly enough, is more or less the same amount of money that Jimmy Cayne was planning to pay Warren Spector over that time -- before Spector took the fall for the bank's subprime-mortgage fiasco that is imperiling the hedge funds.
Felix Salmon's full Market Movers blog post on this subject can be found here.
Laura Rich is a co-founder of Recessionwire, which provides news, advice, perspective and humor about the recession and the recovery.
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