At times like these, with Bear getting flushed down the 14th Floor Mens, you school girls need a voice of authority to give you a sense of history. Show you how we got here. That voice is me. So gather round, kids. Lesson time, courtesy of Bessie's History of Bear Stearns: A Timeline.
-- 1923: Bear Stearns is founded as an equity trading house by Joseph Bear, Robert Stearns and Harold Mayer with $500,000 in capital. While he felt “gipped" at the time, Mayer and his descendants are pretty psyched that they voted ix-nay on Bear Stearns Ayer-May. In a remarkable symmetry, Bear will probably end up with the same $500,000 it started with in 1923.
-- 1955: Bear Stearns opens its first international office in Amsterdam. Later that year in the same city, Purdue dropout-cum-future Bear Chairman/CEO-cum-Destroyer of All Worlds Jimmy Cayne, then 21, consumes his first pot brownie.
-- 1969: At a New York bridge tournament, future Bear Stearns CEO Alan “Ace” Greenberg meets a 35-year-old Jimmy Cayne, then gainfully employed as professional card player. Impressed by Cayne's stage presence and pluck, Greenberg offers him a job as a Bear stockbroker on the spot, without seeing a resume or checking references. As they sealed the deal, Greenberg famously said to Cayne, "What's the worst that can happen? You destroy $100bn in shareholder capital?" As far as we know, it is the only instance of an individual being hired for a Wall Street job at a bridge tourney.
-- 1985: Bear Stearns becomes a publicly traded company, because this is too good a deal to keep from the average investor.
-- 1998: Bear Stearns, now under the watchful eye of Jimmy Cayne, is the one investment bank holdout in the Wall Street-led rescue of collapsed hedge fund Long Term Capital Managment. This dick move, along with Cayne's comment that they ought to "Let them fail," as noted in Roger Lowenstein's "When Genius Failed," is somewhat ironic, considering that Cayne spent the better half of the decade in a great, giving mood, on account of being stoned. Cayne's steadfast refusal to pitch in came despite having tons of weed money in LTCM at the time. This is not a joke – we’re told the man literally had millions of his own dollars in the fund, and still said, "Suck on it." What we have here is the first inkling of J to the C s stewardship of assets.
-- March 2002: The New York Sun announces that Bear Stearns CEO Jimmy Cayne will be writing a bridge column for the paper. The column is titled, "The First Horseman of the Apocalypse." (Kidding about the name, not about the gig.) Note to future investors: When your CEO starts up writing a bridge column in the local rag, this is an early sentinel that all is not well.
-- June 2007: Bear Stearns ponies up $3.2 billion to bail out two ridiculously-named hedge funds created to invest in that can't miss asset class, subprime mortgages: High Grade Structured Credit Strategies Fund and the even more clever High Grade Structured Credit Strategies Enhanced Leverage Fund. See, Bear wasn't smart enough to realize it ought to get this toxic sludge as far away as possible-- so they had to put up more money to pretend that, despite declining values and massive investor redemptions, this shit still floats. To Bear's credit, this subprime stuff is pretty tricky, but it might've helped if Rich Marin, the Bear guru dispatched with overseeing the hedge funds, hadn't spent the summer writing movie reviews for his personal blog.
-- July 2007: Bear Stearns writes to inform clients that the two hedge funds now contain "very little" or "effectively no value" for investors, adding, "You 'member that $3.2bn? Didn't do shit." By August, both funds file for bankruptcy.
-- October 2007: Cayne reassures investors: "Most of our businesses are beginning to rebound." Audible snickers are distinct in the background. Later that month, state-owned Chinese lender Citic pays $1bn for a 6% stake in Bear, giving the firm an approximately $20 billion valuation. You heard me. $20 billion. With a b.
-- December 2007: Bear Stearns posts fourth quarter loss of $854 million on massive mortgage-related writedowns, the first quarterly loss in its 85-year history, prompting Cayne to remark, "Mayhaps those Chinamen aren't so smart after all."
-- January 2008: Cayne is more or less forced to resign as CEO in the wake of a "Wall Street Journal" article detailing his recreational pot use, month-long vacations to play cards, and other hijinks at 383 Madison Avenue. Had Bear been doing a bang-up job like Goldman Sachs, or hell, even Merrill Lynch, at the time, these transgressions probably wouldn't have been such a Big D. But obviously Bear wasn't, and exasperated board members said, "Seriously, Jimmy, the bridge thing, the hedge funds, now the pot? You gotta go." Showing a steely resolve to right the ship, Bear keeps Cayne on as Chairman. The glorious reign of new CEO Alan Schwartz begins!
-- March 10-17, 2008: Shit hits the fan. ‘Member? Moving on.
-- March 19, 2008: A visibly drunk and obviously stoned Jimmy Cayne is spotted in some speakeasy by a WSJ reporter. He is celebrating 'St Patrick's Week', waxing philosophic to the barkeep while snarfing Funions. To wit: "Maybe Bear Stearns was just, like, a little molecule on the tip of my finger, just like a tiny little speck." Bless his heart, he probably believes it. Let's not ruin that for him.
Posted by HAM05 , Mar 20, 2008 5:13PM
excellent reporting levin
Posted by guest , Mar 20, 2008 5:20PM
Bess is on fire today
Posted by Anal_yst , Mar 20, 2008 5:21PM
This is much better than any chronologies i've seen to date, butt i wonder if Meriwether and Cayne are now blood brothers, in that both of them have destroyed more value and between them have put the global economy closer to the edge than any other gruesome twosome
Posted by guest , Mar 20, 2008 5:26PM
I guess that the FBI is looking into the Bear as part of their investigation of 17 firms involved in the subprime shithouse. Maybe Jimmy's drunk ass can stay blitzed until the Feds put the cuffs on him.
Posted by zzz1357 , Mar 20, 2008 5:39PM
Bess, after reading that brilliant chronology of BSC, I want you to write-up Meriwether's CV.
Posted by guest , Mar 20, 2008 5:39PM
Anal_yst do you think Lehman will still be around at the end of the year?
Posted by guest , Mar 20, 2008 5:40PM
hey, I already read this here, http://nymag.com/daily/intel/2008/03/a_quickie_guide_to_the_fall_of.html
Posted by Lowly Assistant , Mar 20, 2008 5:43PM
Saturn Devouring his Son...
This shit is becoming too good. I'm almost tempted to enroll at Western Governors University just to support the cause.
Posted by Anal_yst , Mar 20, 2008 5:58PM
@ 5:40
Compare the two, and you'll get the difference brosky
Posted by guest , Mar 20, 2008 6:42PM
"While he felt “gipped" at the time,..."
the correct spelling for this cute little pejorative is g-y-p-e-d. as in "gypsie".
and it's offensive.
for some strange reason i can't really imagine you using the term "jewed", which would be interchangeable with "gyped", in this context.
would you?
how do i sign up for this joint so i don't have to hide behind "guest".
Posted by guest , Mar 20, 2008 6:58PM
acceptable alternate spelling.
Please steal someone's wallet and move back to Romania.
Posted by guest , Mar 20, 2008 7:05PM
yes, it's acceptable alternative spelling for people who don't understand the etymology of the word. otherwise, i'm afraid not.
perhaps where you're from joo is an acceptable spelling form of jew?
as in jooed.
Posted by diablo , Mar 20, 2008 7:08PM
@6:42 PM
Are you new around here?
Posted by guest , Mar 20, 2008 7:12PM
@7:08
yes
did i break some sort of rule or something?
sorry if i offended anyone. just keeping it real, so to speak.
Posted by John Carney , Mar 20, 2008 8:10PM
@7:12,
You didn't break a rule. But your comments just demonstrated that you hadn't yet internalized the official DealBreaker editorial policy which states that Bess is permitted to be as offensive as she likes.
Posted by Novice , Mar 20, 2008 8:57PM
Lowly Assistant is right: the Goya sells it.
Still, I prefer the original at NYMag. The longer version feels like it overreached on some of the jokes.
Posted by guest , Mar 20, 2008 9:02PM
you have no taste, "Novice." the original edited out every joke. this is perfection.
Posted by merkin capital partners , Mar 20, 2008 10:24PM
what about kiked? no good?
Posted by guest , Mar 20, 2008 10:36PM
for the idiot db readers: http://www.thefreedictionary.com/gipped
Posted by Novice , Mar 20, 2008 11:02PM
1) True
2) I prefer understated humor. CEO bridge column as possible early contrary indicator? BSC ending with its same 500,000? The first brownie of our wonderfully-hyphenated Cayne? The observation that his action on LTCM was "somewhat ironic"? That's beauty. But for me, "First Horseman of the Apocalypse" and Greenberg overreach and destroy gems like the 1985 entry.
Posted by guest , Mar 20, 2008 11:26PM
oh, did you not like 1 out of the 849 jokes in this post, Novice? tell someone who gives a shit.
Posted by guest , Mar 20, 2008 11:27PM
and also, Novice, all the ones you just claimed to find beautiful were cut from the nymag piece, so how again did you prefer that one?
Posted by Novice , Mar 20, 2008 11:35PM
@11:27 Imperial overstretch ruined the lot
@11:26 Bitter about being poorly paid because you can't count?
Posted by SlashAndBurn , Mar 21, 2008 12:38AM
Bess rolls out a top-notch nuclear rant, and some douche is worried about typos...
And the other (same?) mook -- author of NY Mag piece: "Bess Levin, editor, DealBreaker.com"
Posted by guest , Mar 21, 2008 1:04AM
Hey, gYpsy-dude, gipsy is a common British spelling; gypsy is the American spelling. And neither one has anything to do with the Roma people that the terms are generally applied to. If you're really this desperate to be offended, just be offended by the word gypsy/gipsy, since it's origin is "Egyptian", and the Roma people were nicknamed gypsies/gipsies by English speakers who thought they looked sort of like Egyptian people. Kind of like referring to Native Americans as "injuns".
Posted by guest , Mar 21, 2008 2:10AM
Guest @6:45 pm: Unfortunately, I can imagine Bess using the term "jewed," so that line of reasoning is going to do you no good.
Note the subsequent and unremarked use of the term "kiked" @10:24 pm.
I can't stand some of the derogatory remarks about ethnicity that Bess passes of as "humor," but I have to congratulate her for publishing a clever humorous piece in New York Magazine. Way to go, Bess.
I also admit that it's fun to read both the original and the edited versions.
Posted by guest , Mar 21, 2008 2:32AM
Levin is such a Jew
Posted by guest , Mar 21, 2008 3:23AM
I had some retro Scorpions on this afternoon. I couldn't help but mash the words in something that Jamie Dimon could be singing:
"Here I am! To fuck you hard, Jimmy Cayne!"
Granted, the original song is older than many people who frequent this site, but at least Anal_yst will get the reference.
http://www.youtube.com/watch?v=rB8HudfbaTE
--Schmooze
Posted by guest , Mar 21, 2008 9:04AM
Who cares about the Egyptians? The real typo was in the title. It's "card sharp," not card shark -- unless Jimmy Cayne was a gameshow contestant once upon a time and I missed it.
Posted by Anal_yst , Mar 21, 2008 9:52AM
Schmooze, why you were listening to Rock You Like A Hurricane at 3am (or 1 am calgary time?) is beyond me, butt that fits very very well, should do a lil kareoke version for the poor schmucks on the receiving end @ Bear hahaha
Posted by guest , Mar 21, 2008 10:26AM
@9:04 you fucking idiot, that's not a typo. she wrote card "shark" to reference the accusation that he cheated at golf over the summer and probably also cheats at cards, making him a card SHARK.
Posted by guest , Mar 21, 2008 10:34AM
Brilliant. A more concise and thorough exegesis, I have never seen. Kudos to you Bess. Thanks to you, I can now explain the Subprime mess to my 14-year old.
Huzzah!
Posted by Anal_yst , Mar 21, 2008 10:37AM
@ 10:34
See the CDO stick-figure powerpoint (available elsewhere, butt try here http://lolstreet.blogspot.com/2008/02/link-how-subprime-really-works.html)
Posted by guest , Mar 21, 2008 10:40AM
"Um...gypsy woman...do you have items here that you would sell me without putting a curse upon me??"
-Borat
Posted by guest , Mar 21, 2008 11:51AM
Thanks for the picture. I thought I was having a rough day until I saw the little guy.
Posted by guest , Mar 21, 2008 1:11PM
Dude! What picture is that?
Never been an art junkie, but that's my kind of art. Can someone name the artist and/or similar works?
Posted by guest , Mar 21, 2008 2:46PM
Wow, if only he'd have gotten that Purdue degree. He may have even gotten that MBA, too. ...because MBAs from Krannert aren't a dime/dozen.
Posted by guest , Mar 21, 2008 7:25PM
Please lets do away with the anachronistic ethnic slurs such as “jewed” and “gyped”, and find a new word that captures the expression of the inferred meme across geopolitical and social boundaries. I vote for cunted, which also sets precedence and pattern for use of word cunt as a verb - in addition to accepted use as noun and occasional use as adjective (cunty).
Posted by guest , Mar 22, 2008 12:58PM
Well actually, i kinda like this guy. seriously, we already had far enough of all those prep school 1st class cocksucker. jim is cool, jim smokes pot, jim plays bridge and God he likes it. Would you mind if I prefer him to a starvish livid John Thain ?
Posted by guest , Mar 22, 2008 7:41PM
I worked at Bear Stearns for a couple of years, earlier in the decade. Me and the head of fixed income sales were going to give a presentation to the sales force. But before we went we had to show the new Bear Stearns recruiting video. In it Jimmy said, "I love Bear Stearns...most of my personal wealth is in Bear Stearns....We will never sell Bear Stearns!" It ends and it's silent. Then the boss says, "What the fuck is he talking about...who'se gonna buy all my fucking stock?!" And then everyone went nuts throwing shit at the screen where Jimmy's smiling face was still there. That was 5 years ago. Poor bastards!
Posted by guest , Mar 23, 2008 1:59AM
Can Dealbreaker do the readership a favor? I'm not sure how to pronounce Jamie Dimon's last name. Does it sound like "diamond," without the final "d?" Or like "demon?"
Posted by guest , Mar 23, 2008 11:00PM
@ 1:11
Saturn Devouring His Son. It's the most dramatic of Goya's 'Black Paintings'. I would make fun of you for not knowing that, but I guess that not everyone can be an art history major (or look it up on wikipedia)
Posted by SlashAndBurn , Mar 24, 2008 12:06AM
Anal_yst, your link was screwed, here's one that works:
http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true
Funny as hell.
Posted by guest , Mar 24, 2008 7:43AM
@10:26 i know we all love to be apologists for bess but dont you think that you are stretching a bit there?
Posted by guest , Mar 24, 2008 8:22AM
@7:43-- no, not considering how many jokes she made over the summer about him cheating at golf.
Posted by guest , Mar 26, 2008 7:02PM
did anyone else find hysterical the fucking idiot's comment that called someone a fucking idiot for misunderstanding what a card shark is by completely not understanding it himself? shark doesn't mean you cheat, jackass. it just means you're predatory.
fucking idiot.
Posted by guest , Jul 26, 2009 4:12AM
Well, I'm sure this reporter, who is probably jealous of Cayne's rather charmed life, saw the whole Bear Stearns thing coming, and reported assiduously on the dangers of subprime loans, faith in endlessly burgeoning housing market, and credit default swaps. A lot of firms went under - I don't notice where he says what decisions Stearns should have made, only where he was absent.