From The Economist print edition
A Chinese treat for Wall Street’s whipping boy
IF ANYONE had suggested a year ago that one of America’s top investment banks would soon be relying on a firm whose parent was founded by Deng Xiaoping to pull it back on track, they would have been laughed off the trading floor. But that is precisely where Bear Stearns finds itself. Beset by bad news since two of its hedge funds blew up in June, sparking the subprime-mortgage crisis, Bear came under pressure to find a partner with deep pockets. Its response, unveiled on October 22nd, is a strategic alliance with China’s largest listed brokerage firm, Citic Securities. Born of necessity, the deal nevertheless is shrewd for both sides.
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