What happened the week Wall Street went into meltdown? Peter Lee relays his first hand experience of one of the most significant weeks in Wall Street's history. Read his day by day account:
Prelude – Fin de siècle
It all felt a little like the end of an empire – while Bear Stearns nearly went up in flames, Spector and his CEO Jimmy Cayne had fiddled with cards at a pre-arranged week-long bridge tournament. It was soon to become clear that much more than one of Wall Street's most prestigious institutions was in danger of going up in flames.
That the credit bull market had ended in a flurry of bad lending came as a stunning revelation to precisely none of the participants in the wholesale capital markets. They all understood it because they had all played their part in it. Commercial banks had, like investment banks long before them, moved decisively into the business of distributing securities to investors and away from making considered credit appraisals on debt assets they intended to hold for any length of time. They were now paid, and paid handsomely, to gather junk into piles and then shovel it out the door.
