$3.2 Billion Rescue Package Prevents Largest Hedge Fund Collapse For Years
Up to $3.2 billion in loans yesterday was pledged by the investment bank Bear Stearns Companies to help prevent the imminent collapse of on of the Hedge Funds it managed.
The potential crisis came about through apparent poor lending decisions and bad bets on sub prime mortgages.
This would appear to have been the biggest rescue of a Hedge Fund since a consortium of lenders provided $3.6 billion to help stave off the collapse of Long Term Capital Management in 1998.
This problem arose basically because of a deteriorating housing market in the United States and a mixture of poor decisions brought about through bad management and greed.