1. Michael Lewis Bloomberg News, March 26, 2008 1International Finance Monika Hoang Yen Lan IES09049

2. Michael Lewis Bloomberg News, March 26, 2008 March 14 2008 the market still believed that Bear Stearns Cos. Was worth $30 a share Three days earlier Jim Cramer listed Bear Stearns common stock as a ‘buy’ at 62dollars “Bear Stearns is fine! Do not take your money out of Bear.” Even JPMorgan CEO Jamie Dimon thought it was worth more than that… 2International Finance

3. Michael Lewis Bloomberg News, March 26, 2008 Over that weekend, nobody would expect that, but Bear Stearns was believed to be worth $2 a share. Cramer’s March 11 ‘buy’ recommendation was quickly removed Question? If the market got the value of Bear Stearns so wrong, how can it possibly believe it knows even the approximate value of any Wall Street firm? Is purchasing shares a sort of gambling now? 3International Finance

4. Michael Lewis Bloomberg News, March 26, 2008 Liquidity puts were about to make Citigroup the new owner of 25 billion dollar of crappy mortgage securities To both investors and CEOs, Wall Street firms have become extremely opaque. 4International Finance

5. Michael Lewis Bloomberg News, March 26, 2008 Why CEO don’t understand their firm’s failure? Why they have no idea what their traders are doing? Wall Street CEO’s aren’t lazy, or stupid. They are trapped in a financial innovation world where things are changing too fast. New new thing is the profit center, and the people who create it are mobile The complexity of companies renders them inherently opaque. Investors are right now waking up to this fact 5International Finance

6. Michael Lewis Bloomberg News, March 26, 2008 What Wall Street’s CEOs don’t know can kill you- have a lot at the subprime financial crisis today CEOs have no clue what they are doing and what their traders are doing – company distress and collapse They are messing things up, and they just leave mostly with a reward : the famous golden parachutes (Merrill Lynch, Lehman Brothers, Alcatel,…) 6International Finance