Geithner's unsung role in the Bear Stearns collapse

Tom Geithner, our flailing Treasury Secretary, has been cited as having helped cause the collapse of Lehman Brothers. This failure helped to precipitate the financial turmoil which has rippled from Wall Street to Main Street. What has been ignored, though, is that he also played a role in the collapse of Bear Stearns. The recent book, "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street" by William Cohan  tells the tale of the collapse of Bear.Bear Stearns faced a liquidity crisis because of its funding needs. Wall Street firms and banks were not only too panicky to loan to Bear but also had a grudge against Bear for its hardball tactics and its failure years before to join them in rescuing Long Term Capital Management, a giant hedge fund that was in the process of self-destructing. Also, these firms had a desire to pick up the business that would be available if Bear collapsed.What did Geithner do-or did not do, in this case?He refused to...(Read Full Post)

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