. Speaking of which, Barron was deeply grateful to Bonnie for remembering to return to Chatsworth House.
The very night they returned, Barron and Bonnie visited Butler Sean, who was recuperating.
"I'm not seriously ill, just old age. I'll be fine in a few days."
Butler Sean looked at Barron and Bonnie with a look of relief, just as he had when he first welcomed them back to the mansion.
That night, Butler Sean had a glass of whiskey and peacefully slept.
When Ramos arrived in the morning to bring him breakfast, he discovered that Butler Sean had passed away in his sleep.
Barron could hardly believe the news, and Bonnie, likewise, was immediately shocked.
After all, yesterday, although he looked unwell, Butler Sean didn't look like he was about to die...
Regardless, it happened, and it's a small comfort that Butler Sean passed away peacefully, and Barron was able to see him in his final moments.
Butler Sean dedicated most of his life to the Devonshire family, and according to his wishes, he would be buried in the Devonshire family cemetery.
In a sense, Butler Sean was one of Barron's ties to the Devonshire family. Since Barron came into this world, Butler Sean was the one he knew best, so he couldn't help but feel a sense of loss.
...
On March 4th, Bear Stearns, the fifth-largest investment bank on Wall Street with an 85-year history, announced a severe cash shortage. That same day, the Federal Reserve decided to have the Federal Reserve Bank of New York provide emergency funding to Bear Stearns, the fifth-largest investment bank in the United States, through JPMorgan Chase.
Bear Stearns was founded in 1923 and is headquartered in New York.
It is the fifth-largest investment bank on Wall Street and a leading global financial services firm, providing high-quality services to governments, businesses, institutions, and individuals worldwide.
Its core businesses include institutional equities and bonds, fixed income, investment banking, global clearing services, asset management, and consumer banking.
In addition to its home country, Bear Stearns has branches in London, Tokyo, Berlin, Milan, Lijiaopo, and Yanjing, employing over 10,000 people worldwide.
It has achieved 83 consecutive years of profitability in its 85-year existence.
However, even this once-prosperous Wall Street investment bank was crippled by the subprime mortgage crisis.
In this bailout, Bear Stearns will receive a 28-day loan.
The Federal Reserve will provide the loan to Bear Stearns through JPMorgan Chase, but the risk is borne by the Fed. This marks the first time the Fed has provided such a loan since the Great Depression of the 1930s.
The loan was provided through JPMorgan Chase because Bear Stearns, unlike other investment banks such as Goldman Sachs and Merrill Lynch, lacks a commercial banking presence.
Bear Stearns, a major brokerage firm, could not access funding through the Federal Reserve's discount window and had to use a commercial bank as an intermediary.
JPMorgan Chase was chosen because it was one of the few banks to suffer relatively few losses during the subprime mortgage crisis and had a history of tackling major challenges on Wall Street.
Following the news, Bear Stearns' stock price plummeted 47% that day, closing at $30, a nine-year low. The Dow Jones Industrial Average also fell nearly 195 points.
In fact, European banks had already stopped trading with Bear Stearns the previous week, on February 25th—the news had spooked the market, sending investors scrambling to sell financial stocks.
On February 29th, the last day of February, rumors began circulating in the US stock market that Bear Stearns might be facing a liquidity crisis.
Some Ameritrade fixed income and equity traders began withdrawing cash from Bear Stearns, fearing their settlement funds would be frozen if the bank filed for bankruptcy. At the same time, several American media outlets published rumors that Bear Stearns might be facing a liquidity crisis.
These rumors caused Bear Stearns' clients and counterparties to question its ability to meet its obligations.
In this sensitive period of crisis, what could be more devastating than such doubts?
Naturally, a run on Bear Stearns ensued, and cash flowed like a torrent, unstoppable.
By March 4th, the exodus of hedge funds had finally drained Bear Stearns of its last breath, with $17 billion withdrawn. It was this $17 billion in withdrawals that confirmed the rumors: Bear Stearns was facing a liquidity crisis.
Simultaneously, its New York-listed stock plummeted. At this time last year, Bear Stearns' market capitalization had reached $20 billion!
Panic spread with alarming speed, and with the massive outflow of funds, Bear Stearns was left helpless. Wall Street stopped trading with it, its foreign exchange credit lines from counterparties evaporated, and banks withdrew.
By the end of the week, Bear Stearns was a dying giant, but with all its organs intact. If it had a sufficient blood supply and unobstructed circulation, it could still survive and thrive.
But in finance, there are no "ifs."
It could be said that Bear Stearns was bled dry by its clients—on November 30, 2007, Bear Stearns was responsible for handling and clearing $288.5 billion in client funds.
But now Bear Stearns is on the verge of bankruptcy, surviving only with emergency financing from JPMorgan Chase and the Federal Reserve.
This is the efficiency of modern financial markets: the weakest link is removed in an instant, resources are redistributed, and the entire system continues to move forward.
Ironically, much of the coverage of the Bear Stearns crisis has criticized its management for its inaction.
As Bear Stearns sank into solvency, Chairman Cain chose to spend the previous weekend in Detroit playing a bridge tournament—a period during which he had very little contact with Bear Stearns executives or other board members.
By the time he returned to New York to personally oversee the business, other Wall Street colleagues had already stopped providing aid, and the Federal Reserve had been forced to provide emergency financing to Bear Stearns through JPMorgan Chase.
Another notable incident was his abrupt walkout during a conference call on August 3rd of last year to restore investor confidence. This leader had allowed his company to fail.
In fact, throughout the year of the subprime mortgage crisis, Bear Stearns executives had been half-hearted in their efforts to reassure investors and other banks about its operations.
Before handing over the CEO reins to Alan Schwartz in January, Cain had been too lazy to communicate publicly.
They made no effort to reassure the public and keep them informed of progress.
Until recently, in response to growing concerns, Bear Stearns' response was a tepid, detail-free statement declaring it had no capital or liquidity issues.
In contrast, Lehman Brothers...
Media reports praised its painstaking yet calculated operations after the subprime mortgage crisis, restoring confidence among those who wavered.
They also credited Lehman with taking more decisive action to stabilize its balance sheet—its cash cushion was twice that of Bear Stearns.
Lehman's CFO, Erin Callan, presented a barrage of data during a conference call last Tuesday to demonstrate the firm's strength.
Well, at least for now, Lehman Brothers is still a "top student"...