Wednesday, October 17, 2007

Paper clips

Paper clips, aka Ace Greenberg, the legendery CEO of Bear Stearns who was so keen to keep costs under control that he sent a memo to all the employees reminding them to save their paper clips, must be having a fit. Since he left, the bank's risk profile has increased, culminating in a collapse of two of its mortgage based hedge funds this summer. Third quarter earnings fell 61%. Predators are smelling blood and yesterday a Chinese communist party official announced that China's Citic Bank wants to buy a stake. The People's Bank of China has bought a small stake in BG Group (good old British Gas). We should expect more Chinese takeovers (takeaways?) as a result of the massive liquidity bubble which is growing there.

3 Comments:

Blogger Welshcakes Limoncello said...

Nice post. I didn't know about him asking his staff to save paperclips.

1:43 pm  
Anonymous Anonymous said...

I'll have to alert my son to this, he is studying business and economics.

I guess saving paperclips is meant to change people's mindsets they some become much more economically focused.

5:22 pm  
Blogger kinglear said...

Ah well, as generations of Scottish Grannies have said, "look after the pennies and the pounds will look after themselves. And don't get involved in CDOs"

8:05 am  

Post a Comment

<< Home