Case

Cover Page

The Rise and Fall of the Bear/Brave New World

Table of Content

1 Failure Analysis ............................................................................................................................4 1.1 Identify the major factors that contributed to Bear Stearns’s failure ...............................4 1.1.1 1.1.2 1.1.3 1.1.4 1.1.5 1.2 Market Trends ............................................................................................................4 Investment strategies ................................................................................................4 Senior executives .......................................................................................................5 News media ...............................................................................................................5 Public Investors ..........................................................................................................5 Who stood to benefit from its implosion?.........................................................................5

1.3 How did Bear Stearns’s Collapse differ from the Long Term Capital Management’s failure a decade earlier? .................................................................................................................5 1.4 2 What could Bear Stearns have done differently to avoid this fate?..................................6

Liquidity Crisis and Business Model of Investment Banks ..........................................................6 2.1 What is the role of Liquidity? .............................................................................................6 2.2 2.3 2.4 2.5 What is the Importance of Perception of Liquidity? .........................................................6 What could Bear Stearns have done to address its Liquidity concerns?...........................7 What are the lessons we can infer?...