• 17 Jun 2011 at 9:40 AM

Meredith Whitney Knew Bear Stearns Was Going Under But Was Too ‘Scared’ To Say It

By

She told clients in London. She also typed up a note. She even emailed it to herself. But she didn’t send it to anyone else, because after seeing how she’d moved markets with her Citi call and the magnificence of her influence, the idea of being responsible for putting Bear out of business made her hesitate.

The weekend before Bear Stearns collapsed, UBS Chairman Marcel Ospel was in New York trying to sell PaineWebber. They were desperate to raise cash. I started to hear that people were also demanding higher collateral from Bear. They didn’t have the revenues to cover their expenses, and they were so highly leveraged. All of the factors pointed to the abyss. On Wednesday, I was in London, telling several clients that I believed, with certainty, that Bear could go under. I remember calling someone I respect and asking, “Is it possible that Bear goes the way of Drexel?”

The market is a faith-based system, and this could have turned into a run on the bank. I didn’t want to be responsible for accelerating a wave of panic. I was just too scared. I remember not being able to sleep on Wednesday night. You have to be so careful about what you say if you’ve got the microphone. I wrote a note—but I sat on it.

Have any of you ever been scared? Do share with the group. This is a safe space.

Meredith Whitney On Her Bear Stearns Call [BW]

Comments (52)

  1. 1
    Posted by Guesticles | June 17, 2011 at 1:46 PM

    Bullshit!

    - D. Gartman

  2. 2
    Posted by Anonymous | June 17, 2011 at 1:48 PM

    Those who can , trade; those who can’t, are sellside.

  3. 3
    Posted by Guest | June 17, 2011 at 1:53 PM

    I know everyone must be thinking, “oh, that poor note.” But really, she wasn’t as heavy back then.

    –The note she sat on

  4. 4
    Posted by CoveredLong | June 17, 2011 at 1:54 PM

    I feel sorry for that note.

    -John Layfield’s face

  5. 5
    Posted by Afpk | June 17, 2011 at 1:57 PM

    I was going to tell Ron Goldman it was not a good idea to go to Nicole’s house that night…but he left while I was taking a piss.

  6. 6
    Posted by Barry_O | June 17, 2011 at 2:02 PM

    I knew the stimulus and QE2 wasn’t going to work, there are no shovel-ready projects.

  7. 7
    Posted by in love with pmco avatar | June 17, 2011 at 2:07 PM

    Jimmy Cayne was too scared as well

  8. 8
    Posted by BigFatSlob | June 17, 2011 at 2:09 PM

    hindsight is 20/20

  9. 9
    Posted by Dennis Gartman | June 17, 2011 at 2:10 PM

    Predicting a bankruptcy is easy, talk to me when you can predict earthquakes (or at least say “thats what I was eluding to” after one occurs

  10. 10
    Posted by Guest | June 17, 2011 at 2:17 PM

    …or sitting in his office reading a book about Hydroponics and listening to the ’77 Live at Barton Hall show.

  11. 11
    Posted by Pedant | June 17, 2011 at 2:18 PM

    So, that’s why you weren’t in Northeastern Japan?  Cunning.

    -Guy who knows what “eluding” means

  12. 12
    Posted by PasteSpecialFormats | June 17, 2011 at 2:20 PM

    I was scared once….then I said the ‘safe word’ and Meredith turned off the sybian.

  13. 13
    Posted by Lil Jimmy Cameron | June 17, 2011 at 2:28 PM

    I would do her and Bartiromo at the same time with the lights on, Maria spanking me with a catcher’s mitt with Clickclack and Yimyam filming the entire spectacle on an HD camcorder.

  14. 14
    Posted by MD | June 17, 2011 at 2:29 PM

    One time I just knew that the Treasury was going to stop issuing 30 year bonds.  That really scared me, because, well – It was my job to trade those things.  So, I bought $5billion of them and felt much better ten minutes later.

    - Former Goldman 30 Year Trader.

  15. 15
    Posted by NakedShort | June 17, 2011 at 2:31 PM

    I’m so excited, sooooo excited……..I’m so scared!!!!!!!!

    -J. Spano

  16. 16
    Posted by Longpond | June 17, 2011 at 2:33 PM

    I am scared of her chin.

  17. 17
    Posted by Guest | June 17, 2011 at 2:38 PM

    Meredith sweetie, it’s Friday morning, not Monday morning.

  18. 18
    Posted by TS | June 17, 2011 at 2:44 PM

    I wouldn’t be talking about my calls to the psychic hotline for insights in a possible bankruptcy, but that’s just me I guess.

  19. 19
    Posted by Anonymous | June 17, 2011 at 2:47 PM

    Pray tell, PSF, what was the safe word?

  20. 20
    Posted by Guest | June 17, 2011 at 2:48 PM

    take a lap and kill yourself.

  21. 21
    Posted by Old Salty | June 17, 2011 at 2:54 PM

    I already knew I was going to make comment before I knew I was going to make this comment.

    /D. Gartman

  22. 22
    Posted by Raj | June 17, 2011 at 2:58 PM

    I am scared…wonder if my bunk mate has Hep C

  23. 23
    Posted by mk | June 17, 2011 at 2:59 PM

    Hubris

  24. 24
    Posted by Guest | June 17, 2011 at 3:00 PM

    “Muni defaults”

  25. 25
    Posted by Guest | June 17, 2011 at 3:01 PM

    I knew the world was going to end on 5/21/11, effectively advising the Street to go short long dated options big time, and I wasn’t afraid to say. Man up, Meredith.

    -H Camping

  26. 26
    Posted by Anonymous | June 17, 2011 at 3:16 PM

    I call bull shit, there was no fat blonde in Too Big To Fail. If it wasn’t in the movie (I also heard they made a book out of the movie) it never happened.

  27. 27
    Posted by Guest | June 17, 2011 at 3:38 PM

    Cheeseburger

  28. 28
    Posted by Meredith W | June 17, 2011 at 3:53 PM

    Let’s make babies.  Just think about how prophetic they will be.

  29. 29
    Posted by Golden Boy | June 17, 2011 at 3:54 PM

    Maybe

  30. 30
    Posted by RolledFlatbytheDerriere | June 17, 2011 at 4:06 PM

    this comment made my day

  31. 31
    Posted by Guest | June 17, 2011 at 4:09 PM

    This still ended sadly…

  32. 32
    Posted by Guest | June 17, 2011 at 4:13 PM

    In retrospect she should have let you go out, and sat on me.  It’s brutal out here.  Wish me luck.

    –The muni default note

  33. 33
    Posted by Lion's Claw | June 17, 2011 at 4:16 PM

    Lights off, music blaring, in a wrestling ring, her dressed as a lucha libre, me wearing Randy Savage undies, in a cross face hold, sobbing uncontrollably, holding a fist full of IOU’s.

  34. 34
    Posted by HFguy | June 17, 2011 at 4:32 PM

     so true my friend. Amen.

    P. Falcone

  35. 35
    Posted by Guest | June 17, 2011 at 4:39 PM

    No, meredith…that’s not right to keep silent. You have such great pedigree…..maybe not nyu, but not bad. In the future, make sure people know that and express yourself with conviction. Btw, did you know I went to nyu?
    Also, don’t ride the metro north.
    -Hermon Raju

  36. 36
    Posted by AmericanBandersnatch | June 17, 2011 at 4:49 PM

    “I believed, with certainty, that Bear could go under”. 
    I believe, with certainty, that after several beers, I could find her hot and credible.

  37. 37
    Posted by AmericanBandersnatch | June 17, 2011 at 4:51 PM

    Are those ”outs”?

  38. 38
    Posted by Guest | June 17, 2011 at 5:46 PM

    Hey, I do the same thing as you when I’m scared.

    Barry Soetoro

  39. 39
    Posted by Guest | June 17, 2011 at 6:38 PM

    it moved.

    -guy with the white, windowless van in the parking lot

  40. 40
    Posted by Guest | June 17, 2011 at 7:01 PM

    “I believed, with CERTAINTY, that Bear COULD go under”LOLZ!

  41. 41
    Posted by Anonymous | June 17, 2011 at 7:29 PM

    Agreed, under the presumption that you’re referring to beers like this:
    http://www.google.com/imgres?imgurl=http://www.op-online.de/bilder/2009/05/20/306317/143514836-oktoberfest-wiesn-2009-bier-wiesnzelt.9.jpg&imgrefurl=http://www.op-online.de/nachrichten/deutschland/zr-wiesn-mass-kostet-860-euro-306317.html&usg=__XHU1-CgX1kYQFBhb7NEAZhEytko=&h=356&w=475&sz=74&hl=en&start=0&zoom=1&tbnid=RdW7mmqb_FtpjM:&tbnh=131&tbnw=201&ei=wqr7TfzNLMvTgQf7_5nmCg&prev=/search%3Fq%3Dein%2Bma%25C3%259F%2Bbier%26hl%3Den%26biw%3D1411%26bih%3D720%26gbv%3D2%26tbm%3Disch&itbs=1&iact=hc&vpx=687&vpy=82&dur=16&hovh=194&hovw=259&tx=188&ty=102&page=1&ndsp=34&ved=1t:429,r:4,s:0&biw=1411&bih=720

  42. 42
    Posted by PasteSpecialFormats | June 17, 2011 at 7:30 PM

    I was kidding…there is no safe word with Ms. Whitney.

  43. 43
    Posted by Guest | June 17, 2011 at 7:38 PM

    A+

  44. 44
    Posted by tracy jordan | June 17, 2011 at 7:54 PM

    you all act like you don’t worship all her womanly assets and that you’d only go for it drunk with the lights off. But you’re all full of shit. Every single one of you would go all pre-jaculation if she offered herself up to you on all fours, cheeks spread and telling you to go to town on her round mound of profound

  45. 45
    Posted by Hey Booboo | June 17, 2011 at 8:21 PM

    Meredith, I don’t care how many picnic baskets you offer me.  I still will not go down.
    -Yogi

  46. 46
    Posted by Guest | June 17, 2011 at 8:46 PM

    She just gave her former clients a reason to sue her.

  47. 47
    Posted by Anon | June 17, 2011 at 8:55 PM

    14:59 . . .

  48. 48
    Posted by Anon | June 17, 2011 at 8:57 PM

    Go big red!

  49. 49
    Posted by Ellen | June 21, 2011 at 10:56 AM

    your just jealous of her b/c she is sucesful and a woman!

  50. 50
    Posted by Frank | June 22, 2011 at 6:37 PM

    Meredith Whitney: Finance’s version of Chicken Little.

  51. 51
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  52. 52
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