Hayman Capital Manager Kyle Bass, 2007.
name the person standing behind the collapse of the bank Bear Stearns in 2008 – they unwittingly became Hayman Capital manager Kyle Bass. Along with the collapse of Lehman Brothers, this episode is the beginning of the global financial crisis
It is known the name of the financier, which actually sparked eight years ago, the collapse of investment bank Bear Stearns, which marked the beginning of a global financial crisis. He was the founder of the fund Hayman Capital Management Kyle Bass, his name is found in the first time disclosed the documents to the Commission to investigate the financial crisis (FCIC), which familiarized am erikanskaya The Wall Street Journal (WSJ).
When the March 12, 2008 the reporter channel CNBC David Faber interviewed the president of Bear Stearns, Alan Schwartz , one of the questions asked was the request to comment on the “actively spreading rumors about the risk of default” on the part of Bear Stearns and the partners are afraid to work with the bank. Financial institution for several months had serious difficulties, even the year before that hedge funds under the management of the bank lost a total of $ 1.7 billion on bonds secured by a pledge. Schwartz shrugged off these claims, but the reporter said that his sources in one of the Hedge -fondov talked about the fears of bank Goldman Sachs, one of the leading partners of Bear Stearns.
Despite the fact that a few hours CNBC received confirmation that Goldman Sachs is still working with the bank Schwartz , the interview sparked panic in the market. Already the next night Bear Stearns turned to the Federal Reserve with a request for urgent financing of its obligations, since the funds after a wave of rumors have lost confidence in the bank. Already March 14th the Federal Reserve agreed to an emergency loan of $ 30 billion in the form of a purchase of assets, and a few days later Bear Stearns was bought by the bank JP Morgan Chase for $ 2 per share (at the market value of shares of $ 30).
Among the FCIC documents submitted for review by the US National archives, journalists found a memorandum containing a retelling of polling committee members, financier Thomas Marano. He now heads a Real Estate and Tourism Concern Intrawest in Denver (Colorado), and from 1983 to April 2008, Marano led the international department of the mortgage business in Bear Stearns. According to Marano, namely Kyle Bass said Faber problems Bear Stearns liquidity.
Goldman Sachs employees reportedly hinted Bass that are not ready to assume its obligations to Bear Stearns on credit-default swaps (CDS). “I and another trader Bear Stearns contacted Bass, and he confirmed that turned to Goldman Sachs for about such an exchange obligations, and then dedicated to the situation of Faber CNBC, – he told investigators Marano. – Sam Bass was shocked that Faber eventually told this story in a live »
As noted by the WSJ, then many analysts criticized CNBC and personally Faber because he could act in the interests of the players on the decline. , received as a result benefit from the collapse of Bear Stearns. At the same time enclosed to documents FCIC emails show that Goldman Sachs really refused to work with papers Bear Stearns March 11, 2008, the day before the interview Schwartz.
An anonymous source WSJ reported that Goldman Sachs this position was associated not only with the general mood in the market, but with the explosive growth in the number of requests from foundations on such transactions for the transfer of obligations.
the evening of March 11 hedge fund Bass planned to close the high-risk position in the $ 5 billion, but early morning traders Goldman Sachs refused to do it, not wanting to work with Bear Stearns securities, it follows from the FCIC documents. Following this, about 9 am, the bank has agreed to accept Bear Stearns as the counterparty – at the same time as on CNBC Schwartz was interviewed Faber. “News report shocked Wall Street by the fact that Goldman Sachs has refused a simple transaction in securities of their colleagues in the five largest investment banks. The message: do not count on Bear Stearns », – concludes FCIC
After the fall of Bear Stearns fell investor confidence in other investment banks operating in the mortgage market (which with the previous year was in acute crisis).. In September 2008, it led to the bankruptcy of the bank Lehman Brothers. Subsequently, the media claimed that the reason for the collapse of the two banks, which began with the global financial crisis became uncovered short selling, speculative in nature. In this study of the University of Oklahoma in 2009 found no significant effect of uncovered sales in the collapse of quotations companies.
Games Kyle Bass
The head of hedge fund Hayman Capital Management Kyle Bass is known in the US investors and analysts. In the late 1990s he worked at Bear Stearns, taking up the position of Senior Managing Director in the regional office of the bank in Texas. After that he moved to the management company Legg Mason, and in 2005 founded his own fund Hayman.
In 2006, he became an early investor who predicted the formation of a bubble in the market US mortgage lending and tried to profit from it by purchasing securities CDS (analogue insurance against default on debt), thus playing against the market. Since the beginning of the crisis in the market of mortgage loans and the collapse of investment banks Bass earned, according to the Texas D Magazine, about $ 500 million.
Subsequently, Bass, analyzing debt structure of major economies of the world, predicted the euro zone debt crisis, which is fraught with a default on government bonds. Bass idea of imminent default Japanese and US economies sparked criticism from economists. As a specialist in high-risk investments businessman, on the contrary, he urged to invest in Argentine bonds. In July 2014, the authorities have failed to reach an agreement with creditors on payments on the previous default of 2001, and the country was actually in default again.
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