19 November 2007

Remember When I Said That Bear Stearns Would Be Gone in a Year?

We have a little story about the relative success of Goldman Sachs as compared to the other investment banks. What interests me is this quote:
Money soothes a lot of concerns, of course, and Goldman has had plenty to spread around. Through the third quarter, Goldman’s $16.9 billion compensation pool — the money it sets aside to pay its employees — was significantly bigger than the entire $11.4 billion market capitalization of Bear Stearns.
So Bear Stearns' market cap is less than Goldman's payroll for just 3 months.

If they don't go down, they will be bought out. It's just a matter of time before the big fish eat the little fish, and as I predicted at the beginning of August, Bear Stearns will be one of the small fishes.


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