Bear Stearns Downgrades General Motors, or, Watching the Wall Street Catfighting

Sunday, July 8, 2007
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In a discussion about this downgrade with a friend, he notes:

I saw this on The Nightly Business Report last night. What is hilarious is that Bear Stearns downgrades GM on the heels of Goldman Sachs’ “buy” recommendation. [Another thing we recently discussed.] What is notable is that Bear Stearns did not participate in the bailout of Long Term Capital Management and this ticked off the other large brokerage firms. When both of Bear Stearns’ subprime mortgage- laden hedge funds were melting down, Merrill Lynch threatened to sell off the CDO’s that secured the loans Merrill made to these hedge funds (payback for not helping bail out LTCM). The stock market starts getting jittery (because of the Bear Stearns meltdown) and in comes Goldman Sachs recommending GM stock. I believe the Bear Stearns GM downgrade is a bit of payback here. This is fun to watch.

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