- Maybe the reason Bear Stearns held its mortgage securities through the second half of 2007 into 2008 was that Bear Stearns had "marked" its portfolio way too high.
- If Bear Stearns sold mortgage securities to bolster its cash position, it would be "establishing" a new price.
Maybe Bear Stearns knew that the new price (the sale price of any mortgage securities) would be far lower than Bear's marks. Maybe Bear Stearns was insolvent for a long time before March of 2008.
Makes me wonder...
'Disclosure: NO Positions'