Spencer Morgan examines the uniquely colorful and rapidly vanishing culture of Bear Stearns in a today’s New York Observer. You know how it goes: scrappy, poor-smart and desperate-for-riches, flying coach, no paper-clips, buy your own pen, sit in a folding chair. “The Bear mentality was defined by being not like the other banks,” an analyst trader tells Morgan. “They prided themselves on being working-class men, the outsiders, the outlaws of the banking world.”
But Morgan also turns up some very important insights into the mind of Ralph Cioffi, the hedge fund manager who was recently indicted for his role in the collapse of two Bear Stearns hedge funds last summer. It turns out that maybe the guy was a little too good of a salesman.
More after the jump.
From Morgan:
A guy who worked with him said the thing about Mr. Cioffi, which is symptomatic of the Bear culture, is that he was promoted from a salesman position to a money manager position. “I have no idea why he was put in that position,” said the colleague. “He had no experience. He’d been very successful in sales. But those are two totally different jobs.
“So what does he do in this new position? He sells, sells, sells his fund on investors, and then leverages the investments, basically raising money very successfully.”
But the kind of full-steam ahead enthusiasm, the sell-side mentality that made Cioffi a star, may have been his undoing, Morgan concludes.
“He was probably a believer, drinking the Kool-Aid, and thought this was a minor blip,” said another former Bear associate who’d done his time and now works at a hedge fund.
No siree. Mr. Cioffi was no dummy. He had created the Kool-Aid. The Kool-Aid had made him a star. And once the mortgage market started to sour, he was stuck.
Bear Naked Tradies [New York Observer]
How ’bout you sideburns, you want some kool-aid…i’d rather gave a beer
Two senior portfolio managers have resigned from the Bear Stearns Emerging Markets Macro Fund, the only remaining large Bear Stearns hedge fund. I wonder what is going on there given that, from what I have heard, bad risk management and deception at the Cioffi funds paled in comparison to the EM fund.
I think it’s more interesting that Harvard law grads seeking employment with the Justice Department were turned away by the Justice Department recently because of their independent thinking about politics.
Oh what a great day it will be for America when the current administration leaves town. And they won’t get their deposit back.
9:50 is a bitter Harvard Law School grad who can’t even get a job with the government.
“Independent Thinking” is code word for a full-blown case of Bush Derangement Syndrome (BDS). Get a haircut, hippie. Maybe Greenpeace is hiring.
9:50 is a bitter Harvard Law School grad who can’t even get a job with the government.
“Independent Thinking” is code word for a full-blown case of Bush Derangement Syndrome (BDS). Get a haircut, hippie. Maybe Greenpeace is hiring.
9:50, I dont exactly recall ANY administration appointing officers in ‘executive’ position where the person was dramatically opposed to their viewpoints.
The report mentioned negative ratings for people who had worked at Greenpeace etc. That is hardly called ‘independent’ thinking. The biggest scam here is that the high-seers of the lawyer world were pissed that their iron-clad left leaning grip was easing.
It is like the stink the Colorado univ raised recently because a chair was being created for ‘conservative studies’. Or the petition going out against naming a school after Milton Friedman at U of Chi. Or the blanket opposition to anything non-leftist liberal at almost ALL educational institutes.
I appreciate your gall in bringing up the justice depratment issue when the previous liberal administration fires ALL attorneys. Was it a great day for America when that administration left town, after pardoning dozens of criminals for money?
That is a stereotype from 20 years back. I doubt that there is much difference in the backgrounds of the folks ALL the banks recruited in the last 5-10 years (which is what I know of). All the banks go to similar schools and pick up people with simila profiles.
Yes, the top people (who were recruited 20 years back) might very well be different but at the middle and lower levels, there is hardly any difference.
Oh, and Blankfein wasn’t exactly born with a silver spoon in his mouth.
Ummmm… I think we kind of veered off of the topic again.. lol..
Bottom line, no one knows what the hell Cioffi, or Tannin, or any one else was thinking when they got caught up in this sh*t.
I mean it’s normal for people to be blinded by that dense fog of profits surrounding you….problem is, they never see that 30,000 pound tractor trailer filled with horse manure heading straight for your little drop-top aston martin DB9 Volante. Maybe that was the case with Cioffi.. Or maybe.. he just didn’t know what the hell he was doing. Either one of those scenarios wouldn’t surprise me one bit. One thing I have learned during my brief career in finance is that this industry is filled with people who are on both sides of that fence…
9:50 – It’s scary indeed. Remember when they cleaned house on all those prosecutors for their (law abiding)views? Then it was discovered that 150 White House Staffers, DOJ, etc. had gone to the Pat Robertson founded Regent Law School?
10:09 – Do you exactly recall when an administration filled thier ranks with televangelist devotees from the lowest ranked law shcool in the country? (Hint: See Above)
look at the wife, IB is good for $, not pussy
Having spent my time at “Main Justice” many moons ago, it is of course ok for the appointees to be politically connected with the current administration. But that’s like six guys at HQ plus the 90+ US Attorneys around the country. Everyone else is a non-political career service attorney and to vet the newbies at the GS-12 level based on whether they joined the Federalist Society or the ACS is incredibly corrupt. Not to mention stupid. Remember the frat boys who were running the interior department of the Coalition Provisional Authority in Iraq? Remember Monica Goodling and her ludicrous incompetence?
BS had to many Joeys with no clients, but expert number crunchers
Well, they crunched wrong
The Cobblers son, has no shoes
Oh and 9:50, do you recall the kind of people the other Democratic ‘change warrior’ Elliot Spitzer appointed to all the position in New York state?
And the kinds of people that are appointed by ALL administrations Dem or Rep across the states? How about Obama’s home state of IL, starting from the mafia connected dude at the top?
And that is the general state of the Democratic Party, why will the new administration appointees be any different?
Oh yes, change blah blah blah, hope blah blah blah.
Bear still hired people who didn’t have a fancy degree last year.
@11:07
What the fuck does that mean?
Guest @9.47 Can you elaborate on EM fund comment?
Call it what you want but Bear Stearns was a dirty culture of quasi mafia Guineys from Brooklyn, Staten Island, and NJ. They were a bunch of crumb snatchers. The firm as a whole made poor business decisions and therefore sealed it’s own fate.
This is a culture that will not be missed on Wall Street except by those who could only thrive in such an environment.
Hey Kobe tell me how my ass tastes
Why the hell did Warren Spector hire Ralphie for the job of being a portfolio manager? Jayzuz.
Warren has vanished without a trace, or being a bigtime Democrat fundraiser helps when it’s time for CYA.
11:40
exactly the kinda people I had an interview there with a few years ago. Really glad I didnt get it.
Pinky rings and cheezy suits galore at Bear! Marble mouths everywhere.
Culture of Sleaze…the only thing fancy about them was their new building and even that looked like crap after a year or two!
Don’t feel too bad for the Bear guys, most of them probably still live with their mothers. A little home cooked gravy and some cured meats will make the bad times a little more bearable. No pun intended.
Perhaps this is an issue of sample size, but the only few people I knew @ Bear were a few respectable, smart, normal jews and some similar asians.
Maybe its the older generation(s) that are the gabagools?
Kinda funny to hear the word “normal” paired with “Jew.”
@11:40 I totally agree. I wound up there after school for 2 years, was a nightmare. If i had a nickel for everytime I heard the word “Bro” I wouldnt have to work anymore. It was absolutely hysterical. Anyone who had any talent took off as soon as they could get some experience under their belt. They went under because they had a bunch of morons over there, bottom line.
I’ve commented on this before. Most of the younger people at Bear came from a wide variety of backgrounds, had been good students, and came from very good schools. They didn’t perceive their superiors to be “a dirty culture of quasi Mafia guineas from Brooklyn, Staten Island, and NJ.” Frankly, that’s an unmerited and nasty ethnic slur. I didn’t know of any of them living with their mothers. They were just trying to make it in the world, like everyone else.
Most of them are out on the street now, looking for a job. What’s the point of kicking them while they’re down?
@12:23
Funny how the firms run by the “Jews” make it through good times and bad but the firms run by the “Guineys” fail (i.e. Bear).
Trust me leave the financial matters to us “jews”, you guys just keep workin on your pizza making abilities.
As for “normal”, there was nothing normal about the people at Bear, thats for sure. There isn’t anything normal about a 35 year old guy living in mommys basement and driving a pimped out Lexus…hmmm don’t see the “jews” doing that either!
Maybe Jimmy-C and Ralphy-C would smoke up together in the Bear bathrooms?
Where the heck is St. Michael’s College in Colchester?
I mean seriously WTF?
you know who I be, last week kobe couldn’t do without me………can we some some chatter going on this amazing new freestyle courtesy of Shaq daddy himself?
http://www.tmz.com/tmz_main_video?titleid=1626146951
@ 12:28, no ones kicking them while they are down, we just arent shocked. I was there. I am not speaking to these racial comments cause they are stupid, Im just saying the people arent that bright and they definitely got themselves in trouble with this “Us against the world” mantra they lived by. Ace Greenberg would stand there and do magic tricks and I would be blown away that this was goin on
you mean this shit-hole: http://www.smcvt.edu
how many years is he going to do in jail?
@12:34,
I looked at the http://www.smcvt.edu website and found the school to not be the “shit-hole” you claim it is. Perhaps the apartment you occupy and the cubicle you infest might be considered by many to be “shit-holes” that merit scorn.
@1:17, you sound like angry alumni of this pisseteria. Defensive much? LEt me guess, you are a guido SL guy from BSC who calls himself a trader?
You obviously are completely misinformed, the longtime chairman, Ace Greenberg, is Jewish. These comments are senseless. Slinging terms like “guinea,” “jew,” and “gabagool” is idiotic. Its “capicola” anyway. Maybe if you spent more time with your head out of the sand you would be better situated to make a valid observation.
I knew BSC was doomed when I heard one of their “traders” scream out”Bro, I dont make money, I print it. Knowwadimzayin??”
@1:23,
Not an alumnus of smcvt, not ex-BSC, not a guido, just an observer, and it seems that you are ‘stuck on you’.
BTW, how many Ivy’s are on the street these days looking for jobs or just sitting at home with that “kegerator” because they’re tired of looking?
@1:46, I don’t make money, I print it. I dont drink out of a kegerator, I swill the finest sherry off of the naked bodies of 24 year old girls. I am a former BSC trader, living the high life off of JD’s 52 week severance package
You guys have no clue. Bear was THE firm to work for last year. Those guys made just as much $$$ as anyone else on the street and they did it without wasting time and money on a b.s. Ivy degree. I’ll take a hungry guy over a silver spoon any day of the week.
Pat Bateman
@12:29 I don’t condone the slurs you were responding to, but Greenberg, Cayne, Schwartz and Spector were all Jewish, as were most of the BOD of Bear Stearns, so I’m not sure that supports your point.
Amen 2:01.
-mrp
a) Jimmy Cayne should have been minding the store instead of playing cards. What kind of a queer bastard goes to bridge tournaments?
b) Ralphie was making 8 figures and calling his fund “toast” — guess he should have had more brains than to email that comment.
c) How many bear guys will JPM hire and how many of them play bridge?
Forget the racial comments “bros”, if I was a bear lifer and lost a ton of dough I’d want to see Jimmy & Company goin to the big house so he can meet Bubba.