Party At The Manse

Posted by Bess Levin, Mar 20, 2008, 11:46am

Harbinger Capital, run by Philip Falcone, was short Bear from last summer until Monday. Obviously, they just made a truckload of money, and obviously Falcone’s going to want to party. How convenient that he just bought the old Penthouse spread on 67th street, the perfect venue for a bacchanal like this. Everyone's going to be there, including the Bear guys. Alan Schwartz will unfortunately not be able to attend, as he’s scheduled to give a repeat of his CNBC interview from last week, and he really can’t afford to pass up paying gigs. Jimmy Cayne will be brought out and roasted like a suckling pig, and even Charlie Gasparino will be making shameless use of his press pass to gain entry. The invite says “8 pm until ???” but Falcone’s old and will probably be kicking people out around 2. Luckily, Jamie Dimon has graciously offered to host after-hours at 383 Madison, noting on the e-vite, “I can do whatever the fuck I want with this place, I own this bitch. Piss on the walls for all I care. Just kidding, I do care, I told you that yesterday. But I really think the only way we're going to make this "merger" work is by tearing this thing down and starting fresh so, I'm just say, if you have to relieve yourself, don't let common decency stop you. All you'd be doing is what J to the Cay has been doing for the past 20 years.”

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Posted by guest, Mar 20, 2008 11:57AM

march 17, 2008 is the official day when investment partnerships took full control of wall street.

this will be an easy date to remember.

erin go braugh.

Posted by guest, Mar 20, 2008 12:20PM

JPM has sodomized the Bear with the blessing of the Fed. It's kinda funny to watch. It all happened while the CEO was @ some bridge tournament smoking weed, how professional. JPM gets 383 Madison for nothing. I'm surprised the Bear employees/shareholders aren't fighting back. They are just taking it in the butt w/no vaseline. Hey I guess the Fed can always print more money, the dollar will be worth as much as the peso. I wonder if JPM will let bear stearns back into their own building next week, ha ha. Wouldn't it be better to file Chapter 11 or find another suitor? At least let 383 go to auction.

Posted by BruceWayne, Mar 20, 2008 1:21PM


Watching CNBC cover the JPM-Bear saga is like watching a snuff film.

Posted by Anal_yst, Mar 20, 2008 1:41PM

Ok, 12:20

lets imagine for a second BSC files bankruptcy, lets take a look at a few things that'll happen, in no particular order:

1. The remaining clearing, prime brokerage, etc. clients of the Firm all head for the exits.
a)BSC cannot meet their contractual committments to their counterparties, exaserbating panic in the markets and accelerating lossess across virtuall all asset classes.
b) Stockholders complaining about how the value of their BSC stock in the JPM takeout realize they shot themselves in the foot, as the entire rest of their portfolio just took a 20%+ (arbitrary, but not unlikely) hit across the board.

2. Litigation expenses mount, eating up whatever remaining assets BSC still has, if any.
a) Years later, secured bondholders may, may get some $ back, as the collateral backing the notes is now worth zilch or close to it.
b) Everyone else gets jack sh!t.

Now, compare that to what happens with the JPM acquisition. Doesn't sound so bad after all now, does it?

Posted by Anal_yst, Mar 20, 2008 1:43PM

Wow i can't type/spell/etc, oops...anyway the point remains, bankruptcy is not the wonderous solution BSC shareholders seem to think it is. High level of uncertainty and very very low probability of recovery.

Posted by guest, Mar 20, 2008 2:56PM

if any person on the planet can reasonably explain to me where the hell ~16 billion of net cap disappeared to in a few days then i'll gladly give that person a cookie.


Posted by guest, Mar 20, 2008 2:59PM

this fiat was orchestrated to protect investment partnership capital.

anyone who doesn't understand or believe this is a moron. and trust me, i know what a moron is because i am one.

is it possible bear was co-mingling funds?????

that's my guess and i bet i'm right.


this was a hit.

and i hate bear and most people who work(ed) there.

Posted by guest, Mar 20, 2008 3:00PM

Bess, you are fucking hilarious!

Posted by guest, Mar 20, 2008 4:11PM

Do Bear shareholders really think bankruptcy is the answer? I can't believe that's true.


I think the most prevalent fantasy is that someone (Joe Lewis?) finds a white knight to immediately outbid JP Morgan after the shareholders vote the deal down.


Unfortunately, the "lock-up" provisions give JP Morgan the option to rebid and rebid again until sometime in 2009. I'm sure the legality of those "lock-up" provisions are being looked into -- but who's footing the mounting legal bills of the contrary shareholders? If the matter drags on and ultimately goes into litigation, it's going to be very costly.


The shareholders' attorneys would have to devise some kind of "lightning" strategy to get the legal issue submitted as an urgent matter to the Delaware courts, but if there is delay (which there always is, even in the most urgent circumstances), Bear is going to be hard-pressed to stay out of bankruptcy court.


A major asset of Bear Stearns -- the building at 353 Madison --is under option (which would survive a shareholder "no" vote) to JP Morgan, bringing down a potential sale price. Plus, Bear might have to find another place to function, adding to the chaos.


Any Bear officers or employees who help solicit a rival bid may run into separate legal trouble because the deal expressly prohibits active counter-bid solicitation by Bear. If the shareholders who are officers or employees manage to defeat the deal, they could find themselves facing huge individual civil liability to JP Morgan.


Btw, @2:59, I can't imagine Bear, in its worst hour, was co-mingling funds. There's nothing to support that ... you're just stoking the rumor-mill.

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