Bears Sterns was over-leveraged. Some of their counter-parties were as well. They probably would have all fallen if it were not for Fed intervention.
But, here’s the thing, not every bank in America is over-leverged. Some have actually chosen to forgo the insane amount of speculation of their peers and be prudent.
I personally think they should be rewarded for their prudence by being allowed to buy up their bankrupted peers assets for whatever the free market dictates.
