BizJournals Portfolio
Home >   Business Views, Opinions and Blogs >   Business Blogs >   Market Movers >  

Bear Raid In The Uk

Market Movers

by Felix Salmon
Main
Bear Stearns Shareholder Math   Bear Stearns's Share Price: It's Not Speculators

Recent Blog Posts

Links

Mar 19 2008 12:00am EDT

Bear Raid in the UK

Many people believe that Bear Stearns was brought down by a classic "bear raid" - where a rumor gets started, snowballs, and becomes self-fulfilling. In nervous markets, someone who shorts a bank and then starts a rumor that it's in trouble can end up destroying billions of dollars in value.

You think such a thing doesn't happen in reality? Well, it just did, in London. False rumors started getting passed around the market about major high-street bank HBOS, and before long the Bank of England staged an unprecedented series of phone calls to media outlets to try to extinguish the rumors before they became self-fulfilling.

Expect someone to try the same stunt in the US, before long.

. □

blog comments powered by Disqus
Real Business, Real Results
Out of the 'Family'

Did anyone at Microsoft ever watch the (gasp!) offensively funny show Family Guy?

Cruz Missile Lands

Ex-Morgan Stanley exec Zoe Cruz is now heading her own hedge fund. Are Wall Street's leaders done?

Scandal Chic

Martha, Bernie and Skilling know that what you wear for court can go a long way in public perception.

spotlight on

Health Care

Bad to the Bone No More

Companies such as General Mills say they're stepping up efforts to change employees' bad behavior and promote healthier lifestyles. Read More