“You will have to start intellectually, but do not cling to it. When I say, ‘Do,’ try doing. [...] We can go on talking for years and years, your mind can be stuffed with many things, but that is not going to help. Rather, it may harm you because you will begin [...]
“Look at a tightrope walker. He is evidently and completely concentrated, because if he were not, he would fall to the ground. His life is at stake, and it is only perfect concentration which can save him. Yet do you believe that his thought and his imagination are occupied with what he [...]
“One must learn by doing the thing, for though you think you know it, you have no certainty until you try.”
At the last minute Friday morning, the Fed and JP Morgan agree to jointly back Bear Stearns for up to 28 days. In theory, this would alleviate counterparty concerns and encourage them to do business with Bear again. The tired Bear execs were thrilled to get this breather, but analysts take the [...]
By Thursday night, it’s clear that Bear Stearns won’t make it through Friday morning without some kind of miracle. Everyone is desperate to somehow get to the weekend. Friedman discusses their options:
“… Then there was my favorite, which was actually, to coin a phrase from [Bear senior executive] Jeff Mayer, what we were [...]
Goldman Sachs contacts them to ask if there’s any way they can “help”:
If Goldman was calling to be “helpful,” Molinaro and Upton thought, that meant everyone on Wall Street knew that Bear Stearns was in serious trouble. “So that’s taps,” Upton said, “… because all that means is they want to come in and [...]
Bear Stearns’ collapse, once rumors about its liquidity started spreading, was extremely fast:
“I had spent the first part of the week–Monday, Tuesday, up to Wednesday noon, almost every waking minute–talking to customers and lenders,” Paul Friedman explained. [...] “Through Wednesday morning, I still felt pretty good that I could conclude with, ‘We’ve still got [...]
“Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone.”
(Walter Bagehot, financial writer, 1873)
This quote sums up the story of Bear Stearns’ quick and total demise in 2008. I’m having a great time this weekend reading House [...]
Way back in Plato’s day, they knew that you can’t think clearly in the presence of fear and greed:
“… when a man has great joys or sorrows or fears or desires, he suffers from them, not merely the sort of evil which might be anticipated–as, for example, the loss of his health or property which [...]
Even Plato knew that people who are successful at their day jobs can’t simply switch to daytrading with instant success. He writes:
“At last I went to the artisans. I was conscious that I knew nothing at all, as I may say, and I was sure that they knew many fine things; and here [...]