posted by polizeros

Mar 14, 2008 10:43PM

How many billions were in the bailout? What happened that caused them to need so much money so fast? Margin calls? Fleeing business? Something else?

Can JPM absorb Bear? Who, if anyone, is next (LEH or MER)?

What will the collateral damage and blowback be?

posted by guest

Mar 14, 2008 10:50PM

Watch Lehman get squeezed like this on Monday. The next shoe to drop is the CDS counterparty risk since formerly investment grade broker dealers and insurers are now getting bailouts. We will be seeing figures in the trillions. Fed is running out of bullets and election year politics are going to make this mes worse.

posted by guest

Mar 14, 2008 11:31PM

LEH cds got to 400 today bear got to 700.
I expected on monday another drop in price which will make LEH at 500-600 so basically bear on Friday.
Good luck doing business.

posted by Inquisitor

Mar 15, 2008 12:27AM

I can confirm reports of other banks attempting to steal Bear's deals are true. Reports are starting to circulate that show all of Bear's active deals and even some of its pipeline and bankers are being encouraged to raid these clients.

posted by guest

Mar 15, 2008 7:48AM

@12:27am

You are absolutely right about the raids. This is going on all over (all products).

Nothing is for certain with a possible acquisition by JPM. Very different cultures. JPM is extremely tight on credit (tighter than Bear).

You have to consider that, at best, JPM will keep 10% of Bear staff in a merger.

Jkibbel

posted by guest

Mar 15, 2008 9:56AM

If you get the name of who really bought all of the 30 puts early last week you will find out who engineered the takedown.

posted by guest

Mar 15, 2008 10:42AM

Fed engineering bailout of the BSC counter-parties and could really care less of what becomes of the current BSC.

allow for fair and orderly exit of prime brokerage and clearing customers; make counter-parties whole; chop up the bits left and call it JPM...

Mr. Dimon's got the only balance sheet that can pull this off. He'll come out of this with the best looking firm on the street, hands down.

posted by Jesse Livermore

Mar 15, 2008 10:43AM

Bear is history. The word went out Friday to their trading desk to get flat.

Somebody will pick it up cheap early next week end up making a bundle, courtesy of the Fed.

posted by guest

Mar 15, 2008 11:56AM

Bear's franchise value is declining at a fast clip each day. Each day gives Bear's competitors more opportunity to steal business and Bear's employees more time to find new jobs. The best way to maximize shareholder value is to effect a transaction with JPM or another bank ASAP. I would negotiate the deal with a fixed exchange ratio so shareholders benefit if/when the market likes the deal.

posted by guest

Mar 15, 2008 12:28PM

Anybody know any Bear employees? Do they know what's going on?

posted by guest

Mar 15, 2008 12:29PM

The purchaser of the 30 puts was the Pope. He is trying to keep his job. BTW-He takes his orders from Israel. The Eliot Spitzer stong arm tactic used by the Mob didnt work, so the bail-out by JPM buys the insiders just enough time to order up some puts and get out!

posted by Investorcluzo

Mar 15, 2008 1:10PM

are the parts worth more than the whole? I think so, but several hurdles remain and the chinese are now saying they aren't sure they will close their $1 bn investment. and why should they? the money is just going to be used to pay down margin calls (I believe the current condition would qualify as MAC). so what's a brother to do? I'm no option maven, but a straddle or strangle on this bear seems to be the best way to play because this thing is going to zero or the boys at jpm will pay jimmy c and mr. lewis something slightly north of friday's close. that said, investors/speculators are putting a serious volatility premium on the big bad bear's options. I'm thinking the $20 puts offer the best "value", but trying to finish the straddle or strangle at is expensive on the call side. what gives? I know there's an a hedge fund analyst out there that has already crunched the numbers with their super computer, so enlighten me please.

posted by guest

Mar 15, 2008 1:17PM

re 10:43PM

Bear and almost every broker-dealer continue operations using a great deal of leverage. I have heard that in their case the ratio was about 30 to 1. This means that they maintain liquidity through CP issuance and repurchase agreements with money market funds, pensions, etc.

Early this week, while Bear remains in a quiet period as it awaits its Q1 earnings announcement, the rumor about its liquidity problems began to circulate. While these rumors were unfounded, counterparties started becoming increasingly unwilling to buy Bear CP and enter into repo. As the week wore on, and the 25 and 30 strike put volume increased, the fears escalated, creating a classic 'bank run'. This is the reason why Alan Schwartz was able to go on CNBC Wed morning saying that Bear was fine, and on Thursday night resort to desperate measures.

We are operating in a very fragile environment where smoke, it seems, can create the fire.

posted by guest

Mar 15, 2008 1:19PM

BSC is gone. Every part of their business is walking out the door. PB, custody, you name it. JPM is going to get it for a song if they want it at all. I mean they have no faith in BSC their deal with the Fed in non-recourse. Game over.

posted by guest

Mar 15, 2008 1:26PM

re 10:43PM

Bear and almost every broker-dealer continue operations using a great deal of leverage. I have heard that in their case the ratio was about 30 to 1. This means that they maintain liquidity through CP issuance and repurchase agreements with money market funds, pensions, etc.

Early this week, while Bear remains in a quiet period as it awaits its Q1 earnings announcement, the rumor about its liquidity problems began to circulate. While these rumors were unfounded, counterparties started becoming increasingly unwilling to buy Bear CP and enter into repo. As the week wore on, and the 25 and 30 strike put volume increased, the fears escalated, creating a classic 'bank run'. This is the reason why Alan Schwartz was able to go on CNBC Wed morning saying that Bear was fine, and on Thursday night resort to desperate measures.

We are operating in a very fragile environment where smoke, it seems, can create the fire.

posted by guest

Mar 15, 2008 1:28PM

Strange how nobody (including today's WSJ, NYT, this chatroom, etc.) is commenting on the late downgrade Friday by Moody's and the enormous effect that will have. Under the interest rate and FX swap ISDA agreements, Bear will now have to post additional collateral as a result of breaching the downgrade trigger. This is an asymmetric draw on liquidity (they have to post to their counterparties but they get no additional collateral on matched positions). This is certainly the silver bullet.

I have 25 years trading derivatives and now manage a derivative and structured products trading desk... and I can tell you I've never seen a situation remotely this bad. Pray for us all.

posted by guest

Mar 15, 2008 3:16PM

I'm thinking that Bear's withdrawals may have averted crisis for other prime brokers possibly? What if ML or MS or GS was almost out of money but they benefited from client's moving assets from Bear?

posted by guest

Mar 15, 2008 4:00PM

Bear's employees were told of the situation re the effect of the run on the bank and the securing of emergency funding from the fed via an APB on their Blackberries early Friday morning. By the end of the day, they were convinced the bank would be sold over this week-end. Work in the more profitable divisions is continuing over the week-end.

Obviously, the ratings downgrades issued Friday afternoon are going to have a huge impact on business-as-usual Monday. Bloomberg did cover that aspect Friday afternoon, and there were some comments on various blogs, including some posts on DB.

posted by guest

Mar 15, 2008 4:47PM

Bear employees are all working on their resumes over the weekend. Skeletal senior management team is hosting a series of meetings with potential buyers / partners from the private equity, hedge fund and strategic sides.

Only hope for an exit out of this mess is either (a) get enough equity invested (via private equity of major hedge fund) coupled with a much larger, longer term debt commitment (to replace the Fed/JPM backstop) to allow for an orderly liquidation to try to realized some discount to the mid 80's book value, or (b) a purely strategic buyer steps in at a similar haircut to book and gives everyone confidence to await the wind down. True going concern is out of the question as it is impossible to replicate the magnitude of the secured leverage that up until there was a run on the bank was perfectly acceptable to all parties (and what currently exists at every other major CB or IB out there).

If neither (a) nor (b) happen, look for massive dumping of perfectly sound financial assets into a brittle, illiquid market - - then god help us all...

The left hand side of Bear's balance sheet is far, far better than most of the other guys out there (i.e, sup-prime is gone, LBO commitments nearly non-existent). The right hand side just freaked out and headed for the exits.

posted by guest

Mar 15, 2008 5:23PM

Anal_yst, you think JP Morgan will buy Bear?

posted by Anal_yst

Mar 15, 2008 6:40PM

I'm definitely not 'in-the-know' here, butt I'd imagine, as many have pointed out, it'd be more prudent to just poach all Bear's clients/employees (selectively) than to pay for the business...

posted by guest

Mar 15, 2008 7:02PM

on what basis is left-hand side of bsc balance sheet better than others? isn't it mbs and mortgage product that couldn't be sold in the first place or was repo collateral taken back?

posted by guest

Mar 15, 2008 7:15PM

@7:02

Left hand side is better as they have no sub-prime (CFO said they were actually short sub prime a month or two ago at Citi conference) or unfunded LBO commitments that are worth 85 cents on the committed dollar. What they have are hedged, high quality MBS that have been marked to market (not model) as the accountants were up their a** to close the Feburary quarter and they MADE MONEY.

The run on the bank was caused by secured repo counterparties saying "just not worth the risk" and prime brokerage and clearing clients (ie hedge funds) pulling their credit balances, thus creating a decision point for Schwartz / Molinaro - - (a) start dumping these fundamendally sound securtities (i.e., not sub-prime or Alt-A or underwater LBO commitments) into a market that has no bid for anything, or (b) find another secured funding source. They chose (b) which was the Fed. JPM was merely a conduit to the Fed.

@4:47

posted by guest

Mar 15, 2008 7:31PM

In the first paragraph the securities are "marked to market".
But in the second paragraph the same securities have "no bid".

posted by guest

Mar 15, 2008 7:42PM

no bid for the size required in a dump scenario. definitely a bid for portfolios other than a complete unwind of the fifth largest I/Bank

posted by guest

Mar 15, 2008 7:49PM

Thanks for stuffing me with bad Brazilian C Bond trades back during the Russian devaluation, when everyone else was trying to help each other out. Revenge is a dish best served cold. I know I'm not the only one still bitter.

posted by guest

Mar 15, 2008 7:51PM

What do you guys think is going to happen to the new hires that have signed with Bear Stearns - both analysts and summer analysts?

posted by guest

Mar 15, 2008 7:55PM

What do you guys think will happen to the new hires that have recently signed with Bear Stearns, both Analysts and Summer Analysts, that are expected to start this summer? Will offers be retracted? I would think that they keep the analysts because they're cheap labor. And I think they would keep summer analysts as well because they'd need a pipeline for full time hires. Thoughts?

posted by Investorcluzo

Mar 15, 2008 8:18PM

@ 7:55: who needs summers when they don't know if they'll make it through spring? further, do you really want to work for a firm teetering on the brink of disaster? I know it's almost easter, but there's only one man who's been able to rise from the dead and he don't work at the bear. besides, what do you think you'll learn/gain? your best bet is to dress up the resume and restart your search process. if you managed to get an offer from bsc, I'm sure you're still marketable - however, the field just got a lot more crowded. ditto for full time offers. back in 2001, banks deferred or withdrew offers outright. this is no different (except for, of course, the cause). I don't mean to sound like the grim reaper, but my advice: run for the hills. good luck.

posted by guest

Mar 15, 2008 8:33PM

If/When JPM buys them, they're not just going to fire EVERYONE. When bank makes that type of huge acquisition, essentially what they're doing is buying Bear's people. You need smart people to run a complex business. Granted, many will get fired and many will leave on their own, but I think it'll more so be the higher up people in the firm. MD's for the most part. I think new hires would basically just be working for JPM instead of Bear. I'm not sure though... I bet analysts are worrying a lot less than associates/VP's too.

posted by guest

Mar 15, 2008 9:12PM

The only part of BSC that JPM is really interested in is the PB business. JPM doesn't really have one. Almost all of the PB business walked out the door. I'm not sure JPM wants anything to do with Bear at this point.

posted by guest

Mar 15, 2008 9:29PM

What about their sales & trading unit?

posted by guest

Mar 15, 2008 9:30PM

Any buyer can fire as many or as few as makes economic sense. If the buyer has its own parallel operation, there are going to be economies of scale practiced, meaning no need to duplicate every single function. Use BS workers if you need them to handle the extra business. Why would a buyer need the BS back office operations, for instance, once they learn how to get the value out? If there is no buyer, the firm is going to end up being administered by a bankruptcy court as it unwinds.

Let me assure you, BS analysts are worrying plenty. Are they going to have work, who are they going to be working for, and who is going to evaluate the July 2007 - March 2008 effort they've put in at bonus time in June 2008? 50% of their compensation is supposed to come then. Is a bankruptcy court going to authorize payment of analysts' bonuses?

If I had an offer for an internship or analyst starting summer 2008, I'd see what happens in the next week. Don't spend your signing bonus, for God's sake. If you haven't signed an employment contract, put it off until the situation is a little clearer. If you have signed a contract, check with an employment lawyer re your options. As Investorcluzo points out, the firm may defer or withdraw the offer, making the choice for you.

posted by guest

Mar 15, 2008 9:34PM

Re: the comments on new (2008) analysts, if Bear withdraws the offer, is there any realistic possibility of compensation?

posted by guest

Mar 15, 2008 10:03PM

As of Nov 30, 2007 Bear Stearns was counterparty to 13 TRILLION in derviatives contracts

http://tinyurl.com/33em5w

posted by Anal_yst

Mar 15, 2008 10:25PM

re: contracts

I'd imagine especially at the Analyst level they're "at-will" and either party can terminate the agreement at any time with(out) cause.

re: operations

Like most banks I imagine Bear's multitude of systems and processes are at least partially proprietary. Its not like a JPM or anyone else can come in, raid a group/business line and simply absorb the operation just like that. In such a situation there will be the decision as to keep Bear's systems/etc or to make the conversion to the acquirer's platforms, which will be an interesting systems integration issue (and will likely result in a patch-work, stopgap solution that doesn't meet the needs of any party involved, butt thats another story...)

posted by Anal_yst

Mar 15, 2008 10:30PM

Also, if you guys haven't seen it, another gem from the brilliant mind that is Gretchen Morgensen (for serious does she ever understand anything she's writing about, ever?)

http://www.nytimes.com/2008/03/16/business/16gret.html?hp

posted by Random Banker

Mar 15, 2008 10:41PM

@ 9:30.

Its fucking employment at will. The 08'Bear analysts are free to not show up or quit after a few weeks as happens every year even when times are good. The problem is there aren't going to be enough marginal unfilled positions for everyone at Bear to get a job. I mean banks already had too many analysts, lord only knows they don't need more. Their best hope would be for Wachovia to step in and buy Bear. Combining Bear with brokerage assets they picked up from AG Edwards would make them a decent player.

posted by Random Banker

Mar 15, 2008 10:43PM

damn you anal_yst stealing my thunder, as per usual.

posted by guest

Mar 15, 2008 10:45PM

Lets keep in mind that we are coming up to the end of a quarter and the hedge funds will be facing redemption requests that are likely to be larger than usual. Will there be financing available to meet these redemptions? All the BS pb clients are out of luck. How significant will the downward pressure on the markets be? More than likely some tough choices made on which funds survive.

posted by guest

Mar 15, 2008 10:46PM

Why is it that the BSC Board continues to allow Cayne to continue in his position as COB?
IF the position of the COB of a corporation is to provide leadership in creating and or modifying if necessary the strategic goals and objectives of the corporation and if the COB position is responsible to ALL shareholders of the company, why is it that he has not provided such leadership and strategic direction which could have prevented the very obvious lack of prudent damage control and or risk management controls. Is it possible that all current fellow board members approve of his obvious non attentive interest in the future of the firm?
----
Based on what is known about Bear's BSAM alternative investment strategy investment offerings including their single manager funds such as their Emerging Markets Macro fund and their relatively innovative HedgeSelect multi-manager and multi- strategy offering, I would think that a bank such as Wells FARGO which has a similar offering of alternative investment strategies (Palette) available for their wealth management clients might find interest in acquiring the total BSAM department since the concept is virtually the same and the professional personnel and client investors would probably like to be with a major forward looking bank.

posted by Random Banker

Mar 15, 2008 11:07PM

@ anal_yst:

That column was like a fucking joke. Are you kidding me? "Bear Stearns has a lot in common with Drexel"? And then nothing to support that. Well then Gretchen Morgenson has a lot in common with Ashley Dupre, in that they're both stupid whores.

Printing shit like this should be criminal. How does Krugman keep himself from walking over to her desk and slapping her across the face with a rolled up copy of the Sunday Times?

posted by guest

Mar 15, 2008 11:33PM

Bear employees in the office this weekend moving their shit out so they don't have to do it on Monday.

As of 5pm, JPM not interested in the Bear deal.

posted by Investorcluzo

Mar 15, 2008 11:40PM

@ random banker: totally agree with your assessment of the wretched morgenson. looks like she read barrons the decided to write her piece, the only problem is that she got santoli's analogy a$$backwards. but this isn't the first time she printed faulty $hit.

@ 10:30, if you got a signing bonus, cash the check now (before everyone else does and those no money left in the till) and start interviewing. even if you get another job, you can use that signing bonus to repay the one from the big bad bear. you could potentially double up if bear withdraws the offer because you would have a legal claim against them (you signed a contract). as the others have pointed out, it's employment at will. bofa fired a second year analyst in november - which makes no sense b/c they only sign on for 2 years and cost next to nothing (I'm not saying they aren't worth anything - I paid my dues and was worth every penny), instead they should have let go some dead beat md's who cost 10x as much. but wall street has always been poorly managed.

posted by Investorcluzo

Mar 15, 2008 11:43PM

apologies for the poor spelling/grammar, been drinking too much watching georgetown lose to the damn panthers. fk!

posted by guest

Mar 15, 2008 11:44PM

pb sr mgt saying that someone acquiring pb business is Bear's best hope

posted by Anal_yst

Mar 16, 2008 1:46AM

The Gretchen article was way too much for me, such to the point that I actually wrote her a little note (note to self: in the future avoid writing letters to people while drinking/drunk...) Text as Follows, for shits and giggles:

Gretchen,

Your piece, "Rescue Me: A Fed Bailout Crosses a Line" borders on being little more than populist, sensationalist reporting. You have supplied us with no new useful information, but take plenty of time to point out the unfairness, so-to-speak, of this situation. Had you taken the opportunity to use your significant position in the journalism world to actually produce something useful, maybe you would have discussed, for example, the $13 TRILLION + in notional value outstanding of Bear Stearns' derivative contracts. Are you suggesting that it would be a prudent idea to let Bear default on these contracts? This one fact in-and-of itself strongly suggests that every other stakeholder in the Financial system, nay, the Economy itself has a vested interest in, at the very least, making sure this situation ends in an orderly unwind. This, of course, doesn't even begin to dive into the consequences of Bear's clients accounts, should they enter into bankruptcy. As of the end of 2007, Bear had over $40bn of client assets in their Wealth Management unit. Between SIPC and FDIC, how much do you think taxpayers would be on the hook if even a fraction of those assets were Federally insured?

These are merely two very obvious issues at hand, which you very conveniently disregarded while writing this article. I have read your material for years and have great respect for what you've accomplished, but this article is so appalling, such an unfortunate example of irresponsible journalism, that I'm having trouble it was even your hand that penned it. This article sounds more like one of the liberal comments found more often on NY TImes' Deal Book than the work of an intelligent, respected professional such as yourself. I hope that going forward, you make an honest attempt to understand that the effects and consequences of letting Bear Stearns fail will extend further than the walls of 383 Madison, into virtually every crevice of the economy. Much to the chagrin of liberal anti-Wall Streeters, the fallout would not be limited to a bunch of right robber-baron types. Quite the contrary, governments, corporations having nothing to do with high finance, and countless individuals would all feel the effects. Your article clearly, and unfortunately, exemplifies what it means to cut off one's nose to spite one's face. Yes, I will agree, the principle of avoiding moral hazard, of letting those who have erred pay for their mistakes is noble, and one which we should, ceteris paribus, attempt to uphold. However, in doing so, we must take into consideration the full body of facts, which you have so conveniently avoided with this article.

I hope that going forward, you make an earnest attempt to do a bit of research before penning such potentially influential pieces.

Regards,

Anal_yst

posted by Anal_yst

Mar 16, 2008 1:58AM

Fuck that was horribly written, good thing I didn't criticize the lack of any editing of her article haha ha..ha? d'oh

posted by guest

Mar 16, 2008 2:02AM

New 2008 analysts: If Bear rescinds your offer, I don't think there is a realistic chance of compensation.

I'm glad to read the critical comments regarding Gretchen Morgenson's column. She's obviously been saving up her venom for a long, long time.

@10:46pm, a lot of people wish they knew why the BS board kept Jimmy Cayne as chairman. Another question is how he managed to stay as CEO until age 72. What's wrong with that guy is no small thing. On the other hand, the firm was making a whole lot of money until summer 2007.

Remember how Jimmy Cayne was fretting in the NY Times last summer about how dinner party hostesses regarded him after the hedge fund debacle? I'm glad he's capable of feeling some pain, because he's entering a whole new level of notoriety.

posted by guest

Mar 16, 2008 3:31AM

Re 2:02am post - The firm was making a lot of money in 2007 has something to do with the services, products and services in place when he took over the COB position in the early 2000's. Any firm which chose to NOT offer such a simple and minor but important "automatic sweep" of net credits (and debits) to and from money market funds for all individual investor's accounts for more than 25 years after firms like Merrill Lynch and virtually all other retail competitors offered such a service (just because the firm made more money on the net credit balances of such accounts) shows that the person chosen as CEO to be responsible for providing the very best services to its registered representatives and individual investor clients was NOT meeting his responsibilities to his firm's sophisticated clients. The fact that the firm did not have any formal Mutual Funds to offer their clients during the 60's , 70's, 80's, and until the end of 90's - the top of - the Mutual Fund Market in terms of assets under management, indicates that the CEO was not keeping his retail brokers competitive with the retail investor clients it was attempting to attract. And, then, within less than a decade, it sold the Mutual eliminated the MF Department and - guess what - started to focus on building up the hedge fund offerings during the last few good years of the hedge fund performance and growth which had been growing logrithmatically since the early 90's.
So Whoever was the CEO or COB during these past 15 years did not seem to have a good sense as to the timing of entry and exit from these reasonably "in demand" services... and he obviously overstayed some of the areas which the firm continued to emphasize in terms of percentage of revenues and profits derived from such departments. With regard to the well know and well regarded "Risk Management" (and the "Measurisk" service) it offered to institutional investors, it is hard to believe why the senior management (specifically the CEO and/or the COB) did not require such controls on the funds which the firm was offering to its client investors.. And the ONE PERSON who held both of these (CEO and COB) positions is STILL ( why??) holding the COB position which - in most firms - is the position with the responsibility of being the corporate strategic planner - responsible to BOTH employees and Shareholders to LEAD the company toward a competitively and diversified company offering attractive services and products to its high net worth clients.
And, according to the articles in the WSJ, GUESS what he was doing when the shit hit the fan this past (full) week?
(Hint: Last time - when all these "events" began to surface, he was reportedly taking a well deserved break playing Bridge and Golf and, according to the WSJ, taking time to inhale (cigar?) smoke during his breaks from hard work. )
Ye gods, what does it take and what is "the story behind the story" as to why THE board of directors of this PUBLIC NYSE listed company continues to retain him as the COB - chief "spokesman" for shareholders and the KEY person in charge of Corporate Strategic Planning for the employees, clients and shareholders of the company?

posted by guest

Mar 16, 2008 3:31AM

Anal_yst, writing a letter to a prominent columnist and signing it "Anal_yst" prolly isn't the best way to get your voice heard. Your letter is great, though. Get Ron Blarney or Joe Weisenthal to print it as a post next week.

posted by guest

Mar 16, 2008 5:39AM

Anyone who has had any interaction with BSC senior management should be wise enough to know that they have no credibility. The question now is - in this world of derivatives and OTC contracts, what mechanisms should be in place to make sure that failure of a single institution does not lead to much broader consequences?

posted by guest

Mar 16, 2008 7:34AM

http://www.bearstearns.com/sitewide/resources/bssc/safety_cust_assets/index.htm

Of course, they are still rated A!

posted by guest

Mar 16, 2008 8:11AM

Bear Stearns built it's fixed income business on the backs of EMC Mortgage (and subprime b/c paper borrowers) which was formed in the early 90s to service scratch and dent loans from the RTC and then others. Bear's model was to buy back loans from Savings and Loans in the early 90s such as Home Savings of America and package them into securitizations via conduits it created to fulfill the market demand it created.

Bear was one of the leading forces, along with Lehman, in buying these distressed assets then keeping the servicing at it's EMC unit in Dallas where very aggressive special servicing techniques would extract "net liquidation proceeds" (i.e. equity stripping by foreclosure of homes) and EMC and Bear would then pay investors high returns on their MBS/CDO products.

However, as the courts and regulators began to catch up on the schemes and home values fell, rather than rose, Bear's very aggressive predatory servicing model could no longer rob Peter (borrower) to pay Paul (investors) and the ponzi-like scheme dried up since there was no more cash flow to extract from it's servicing portfolio since borrowers were upside down on their mortgages and EMC could not hold onto the distressed servicing portfolios and after Bear's Hedge Funds Imploded and the market reality realized that they had been sold a bag of goods and no one knew who owned what [borrowers not told who the real holder of their notes were and investors didn't know what notes and mortgages they did own] caused wide-scale panic and foreign investments and pension funds quickly realized that there is no such thing as the goose that laid the golden egg, just the Bear that took several "dumps" along the way in the woods of securitization on the way to leaving a trail for all investors and borrowers to untangle and unravel in courts in the days, weeks, months, and years to come.

No one questioned how a stock in the low teens in the early 90s (except a few of us) managed to give almost 100% annual returns until this past summer. Now, all that is left is a wounded and soon to be dead bear in the woods with the vultures circling to split apart the carcass left. Do a search for a report called PredBear.pdf for more details!

PS look at Lehman's special servicing unit and that of Goldman who bought notorious Litton Loan. The devil is in the details and the special servicing ops of the Wall St banks!

Nye Lavalle

posted by guest

Mar 16, 2008 9:30AM

@Nye Lavalle,

Brilliant and long overdue!!!

posted by guest

Mar 16, 2008 9:46AM

lol... who was the clown that said there was no comparison to drexel and bear?

http://feeds.wsjonline.com/~r/wsj/deals/feed/~3/251485373/

posted by guest

Mar 16, 2008 10:52AM

In case anyone else was curious as to who Nye Lavalle is (according to a fed district court in Texas, see http://blog.copywrite.org/2006/10/14/the-bear-stearns-companies-inc-v-lavalle) -

During the Pew Suit, Lavalle harassed, threatened, and otherwise acted uncivilly toward EMC’s counsel and employees. This behavior culminated in the Texas state court’s issuing an order of contempt for violating a protective order and an order directing that Lavalle be arrested. Lavalle left Texas, however, and undertook a research and writing campaign against Bear Stearns and EMC. He produced a voluminous report detailing the alleged abuses of plaintiffs, and created Internet web sites and mass e-mails in which he asserted the same basic charge–that Bear Stearns and EMC have engaged in abusive, illegal, and immoral business practices that harm mortgagor-debtors nationwide.

posted by diablo

Mar 16, 2008 11:39AM

Everyone read Yves Smith's take on the Bearn Stearns death watch? Scary shit. Agree?

http://www.nakedcapitalism.com/2008/03/bear-death-watch-update-and-nightmare.html

posted by guest

Mar 16, 2008 1:50PM

JP Morgan is buying BSC. It will be announced in a few hours. No one knows what theyre keeping or selling off. Most expect a complete selloff of BSC w JP Morgan keeping what they want.

-big r

posted by guest

Mar 16, 2008 2:07PM

Sure hope you are right. We need a sale to be done and announced - and soon.

posted by Investorcluzo

Mar 16, 2008 2:08PM

@ big r: looking forward to the announcement on my wsj email alert.

@ diablo: while the piece at nakedcapitalism was good, it seems to be a worse case scenario. as one of the commentors wrote, bsc likely wrote on both sides of the swaps listed in table so there is no real way to know what the true exposure is at the end of the day (unless you're one of the jpm analysts who has been going over all the transactions this weekend). this is why assured guaranty hasn't taken the same beating the rest of the monolines took. that said, this is a run on the bank. there is value to be had. currently the market is suggesting that value is 36 cents on the dollar. however, that's before they start marking things down for the easter sale that starts tomorrow (or tonight as diablo suggests). current book value is $84, anyone care to guess what that number will be tomorrow at 4:30 pm (when the earnings are released)?

posted by guest

Mar 16, 2008 2:19PM

@ 1.50:

what is your source?

anal_yst:
love the review of GM's NYT piece. it's more impressive that you were hammered. she sounded like Ralph Nader almost.

trouble with this mess is that the losses that are in the system like a hot potato: no one want to realize them. banks have taken write downs, but other owners of the securities (or for that matter, homes backing the securities) have a psychological issue taking the hit because then the losses are realized. until someone or some entity decides to write a check, these markets will trade sticky. if Bear goes under, it will only add to the market's lack of liquidity.

posted by guest

Mar 16, 2008 2:26PM

on the issue of losses - and whether Roubini - Jim Grant and the other doomsters are actually right - see the attached. I think its real good.

http://blogs.ft.com/maverecon/2008/03/double-counting-101-inside-versus-outside-assets/

posted by guest

Mar 16, 2008 2:28PM

The fed should not be saving bear. This is like trying to enron or an internet stock. As much as this will hurt the entire street, it is best let bear go under, go through the pain of another mkt adjustment and move on -- the weak and the stupid are not meant to survive. As for Cayne, he should be gang-raped by all employees at bear who lost/will lose their jobs because of him.

posted by guest

Mar 16, 2008 2:36PM

JPMorgan is nearing deal to acquire Bear Stearns. The deal will likely lead to massive layoffs at Bear as JP Morgan consolidates businesses.

http://www.cnbc.com/id/23658905

posted by guest

Mar 16, 2008 2:38PM

But the Fed is not in fact saving Bear. Bear shareholders will walk away with what? - $20 a share maybe. Thats down from $170. Thats saving? If a sale does happen the Fed will have prevented the great market disruption that a forced liquidation would have caused. Thats the right thing to do.

posted by guest

Mar 16, 2008 2:45PM

@ 2:38,

The Fed isn't saving shareholders but the Fed is saving Bear creditors!

posted by guest

Mar 16, 2008 2:47PM

and they better!

posted by guest

Mar 16, 2008 2:49PM

@ 2:36,

Has any real source said a deal is near? (Charlie GASBAGarino isn't a real source. He's a bologna eating idiot.) I think a deal will be reached today or tomorrow, but that's just a guess.

posted by guest

Mar 16, 2008 2:52PM

Another post from Buiter. The Fed should start buying mortgages - for good cash money. And on a very big scale. And right now.

http://blogs.ft.com/maverecon/2008/03/2-trillion-more-of-collateralised-loans-and-outright-purchases-of-private-securities-please/

posted by diablo

Mar 16, 2008 3:00PM

Isn't it more likely that Bear will have to file Chapter 11 before a deal is made? They should be technically bankrupt after the bank run ends.

posted by diablo

Mar 16, 2008 3:03PM

@guest 2:52 PM

That will require printing massive amounts of money. How likely is that? But lets not despair, Bush is meeting with Paulson and Bernanke tomorrow morning. The 3 of them will figure it out. ;-)

posted by guest

Mar 16, 2008 3:06PM

Printing massive amounts of liquidity right now is exactly what we need. We can sop it up later. Buy mortgages and don't cut rates - which will only bust the dollar and the yen based carry trade. See attached.

http://blogs.ft.com/maverecon/2008/03/when-is-increasing-liquidity-or-the-monetary-base-not-inflationary/

posted by big r

Mar 16, 2008 3:23PM

less than $15 a share?!

posted by guest

Mar 16, 2008 3:33PM

Anal_yst, what do you think JP Morgan's stock does tomorrow if they buy Bear at $15/share and it goes through tomorrow?

posted by guest

Mar 16, 2008 3:34PM

With the focus on Bear Stearns, why has no one looked upon Goldman Sachs’ as the ethically challenged?

From stating misleading earnings to rumors of Bear’s liquidity, where is the data/trending to prove any of their allegations? Can words purely take down a company with 80 + years of consistent profitability? If this is the case, I suggest that every firm on Wall Street vastly increase their funding for PR (Public Relations). Damn the due diligence of market analyst as well as buying/selling; while we’re making up news, I have one head line for you, “Lines connect linking Goldman rumors to the lost at the Extell Wall Street Charity Boxing Championship.” With real jobs on the line in a battling recession companies should exercise more ethical means of profitability. The damage is done to Bear Stearn, however will rumors really continue to resign over finance as it has already infected every other industry?

posted by guest

Mar 16, 2008 3:50PM

http://online.wsj.com/article/SB120569598608739825.html?mod=hps_us_whats_news

posted by guest

Mar 16, 2008 4:13PM

They gor three hours left...

posted by guest

Mar 16, 2008 4:14PM

But, you know. low price for BS from JPM will lead to falling prices of GS, MR, MS, Lehman...

posted by guest

Mar 16, 2008 4:29PM

The key graph:

"One stumbling point appeared to be the amount of risk that J.P. Morgan would absorb in any type of transaction. While J.P. Morgan is eager to snap up some of Bear Stearns assets—such as its prime brokerage business that caters to hedge funds—Chief Executive Officer James Dimon was reluctant to pursue the deal without certain assurances that would protect his firm's exposure, said people familiar with the matter."

Basically JPM will stand up to Bear trades but wants indemnification (Federal government takes the losses?) on any of the skeletons they uncover. I hope Dimon gets it... bitches.

-- Dave Chappelle

posted by Investorcluzo

Mar 16, 2008 4:35PM

if the reports are accurate, jpm is getting bear for less than kenny boy lewis paid (is paying) for countrywide. I'd say that mr. dimon got a better deal. with the appropriate structure, he could limit the downside risk, sell the bear building (or move in, 277 park is a little ghetto), then hope he's able to stop the bleeding in the pb business. the bonus would be incremental investment banking business.

btw, the people getting the real short end of the stick are the employees who own close to 23% of the company...ouch.

as for gs and ms trading down tomorrow, I don't think it's a given. lehman, however, is the wild card, there is enough "end of world" chatter out there that they could be the next self fulfilled prophecy to materialize.

posted by guest

Mar 16, 2008 4:52PM

David Jackson is on the board of dubai world. Wouldnt it be funny if after killing dbai world in the ports affair that Lehman comes a begging. Wonder what congress would say

posted by guest

Mar 16, 2008 5:47PM

at $15 per share (if it were to be), wouldn't that attract more buyers?

posted by guest

Mar 16, 2008 5:49PM

Housing Group Challenges FED BSC Deal

http://tinyurl.com/39obyv

posted by guest

Mar 16, 2008 6:00PM

Tell that Housing Group to go back and read "Reminisces of a Stock Operator." When the gov't wants to beat you, they can and will change the rules on you. And there's nothing you can do about it. This deal HAS to get done. Too bad, so sad, good bye . . . bitches.

-- Dave Chappelle

posted by guest

Mar 16, 2008 6:27PM

I wanna see Cayne, Cioffi, Molinaro and others perp walked just like Lay, Skilling and Fastow.

posted by guest

Mar 16, 2008 6:32PM

Bear Stearns is getting bought for $2 billion, and the real estate for their headquarters is worth $1 billion. The entire investment bank is worth only $1 billion.

posted by mrpink

Mar 16, 2008 6:33PM

From Reuters:

(Adds bylines, detail, comment from banker)
By Dan Wilchins and David Lawder
NEW YORK/WASHINGTON, March 16 (Reuters) - JPMorgan Chase &
Co is close to rescuing the fifth-largest U.S.
investment bank, Bear Stearns Cos Inc , a person
familiar with the matter said on Sunday, in a deal that could
be announced in the next few hours.
The Wall Street Journal said on Sunday that Bear Stearns
could sell itself for around $2.2 billion, or less than $20 a
share.
The low sale price, equal to about two-thirds the company's
$30.85 closing share price on Friday, signals just how dire the
situation is for the 85-year-old investment bank.
The deal with JPMorgan Chase has not been signed yet, said
the person Reuters spoke with on condition of anonymity.
Bear Stearns' cash reserves were drained by fleeing
customers on Thursday, and on Friday the bank secured emergency
funding from the Federal Reserve, extended through JPMorgan
Chase.
The Fed is widely seen as having provided the financing to
prevent Bear Stearns from toppling, and potentially bringing
other banks down with it.
Bear Stearns trades interest-rate swaps, credit default
swaps, and other derivatives with dozens of banks globally. If
Bear Stearns went bankrupt, all of its trading partners could
suffer.
"It wouldn't just be Bear's problem, it would be everyone's
problem," said Marino Marin, an investment banker at Gruppo,
Levey & Co who has restructured banks in the past but is not
involved in this deal. "It would be apocalyptic," Marin added.
JPMorgan Chase, the third largest U.S. bank and one of the
few global banks relatively unscathed by the credit crunch, is
looking to limit some liabilities in acquiring Bear Stearns,
the Wall Street Journal reported.
(Editing by Tim Dobbyn)
(

posted by mrpink

Mar 16, 2008 6:33PM

More interesting..

NEW YORK, March 16 (Reuters) - Bear Stearns Cos Inc
Chairman Jimmy Cayne was playing cards in a tournament late
last week while his company's future appeared to be at risk,
according a published report.
As the bank hammered out an emergency funding deal on
Thursday with the Federal Reserve and JPMorgan Chase ,
which resulted in Bear's shares falling by as much as half,
Cayne was playing in the North American Bridge Championship in
Detroit, The Wall Street Journal reported on its Web site on
Friday.
Cayne, who in January stepped down as Bear Stearns'
long-time chief executive, is no stranger to controversy about
his hobbies. Last year he was criticized for spending too much
time playing bridge and golf while Bear stumbled on wrong-way
bets on subprime mortgages.
Cayne played cards last week during a period in which Bear
Stearns CEO Alan Schwartz held conference calls with directors
about the pending cash pledge, the newspaper said, although
Cayne participated in at least some of the dialogue.
The Wall Street Journal said Cayne did not respond to a
request for comment that it left at his New York office.

posted by mrpink

Mar 16, 2008 6:34PM

NEW YORK, March 16 (Reuters) - Bear Stearns Cos
hopes to seal a deal to sell itself to JPMorgan Chase & Co
before Asian markets open on Monday, the Wall Street
Journal reported on Sunday.
The deal would save the 85-year old investment bank, which
said on Friday it had suffered a run on the bank, and had
secured emergency financing from the Federal Reserve, which was
supplying funds via JPMorgan Chase.
Bear Stearns could fetch around $2.2 billion, or less than
$20 a share, the newspaper said. Shares of the fifth-largest
U.S. investment bank closed at $30.85 on Friday, down 46
percent from the prior day. Terms were still be hammered out,
the newspaper said.
A stumbling block in any deal is the amount of risk
JPMorgan Chase would be taking on, the Wall Street Journal
reported. The bank is looking for assurances that would limit
its liabilities in taking on Bear Stearns, the newspaper said,
citing people familiar with the matter.

posted by mrpink

Mar 16, 2008 6:35PM

Damn 6:32 :)

You beat me to the punch ;)

-mrp

posted by guest

Mar 16, 2008 7:03PM

JPM doing the deal for 2$/share.

posted by mrpink

Mar 16, 2008 7:05PM

I must say.... I give my highest admiration not to Goldman, but to the shrewd, Queens-born man sitting across the street from Cayne's offce in 277 Park. He just snapped up a snazzy new office tower.

THIS IN:
19:05 16Mar08 RTRS-JPMORGAN CHASE TO ACQUIRE BEAR STEARNS

posted by big r

Mar 16, 2008 7:05PM

$2 holy shit

even if it was $50 the equity was going to be worth zero in the end.

posted by AJ

Mar 16, 2008 7:06PM

Holy crap, does it really say $2 per share on wsj.com

posted by Anal_yst

Mar 16, 2008 7:06PM

It definitely does, wow...

posted by mrpink

Mar 16, 2008 7:07PM

19:05 16Mar08 RTRS-JPMORGAN CHASE TO ACQUIRE BEAR STEARNS
19:06 16Mar08 RTRS-JPMORGAN CHASE & CO SAYS TO BUY BEAR STEARNS FOR ABOUT $2 PER SHARE.
19:06 16Mar08 RTRS-JPMORGAN CHASE & CO SAYS WILL EXCHANGE 0.05473 SHARES OF JPMORGAN CHASE COMMON STOCK PER ONE SHARE OF BEAR STEARNS STOCK

posted by mrpink

Mar 16, 2008 7:08PM

19:08 16Mar08 RTRS-JPMORGAN CHASE SAYS WILL HOST A CONFERENCE CALL ON SUNDAY, MARCH 16, AT 8:00 PM ET

posted by guest

Mar 16, 2008 7:09PM

oh man, can't wait to move out of 277. such a dump.

posted by AJ

Mar 16, 2008 7:10PM

Bear's problems must be so much worse than they looked... $2/share is like $300 mm market cap?

posted by guest

Mar 16, 2008 7:13PM

Yes, maybe someone else should have thought about paying 3$ a share, get that building alone for 500 million?

posted by mrpink

Mar 16, 2008 7:14PM

19:13 16Mar08 RTRS-U.S. FED SAYS LOWERS DISCOUNT RATE TO 3.25 PERCENT, EFFECTIVE IMMEDIATELY

posted by AJ

Mar 16, 2008 7:18PM

They're getting the building basically for free, if you assume the company is still worth something. Alternatively, the company is negative and the building is the only thing that pulled it up...

Also, does this put Jimmy Cayne in the poor house? His 6 million or so shares are now at $12 mm. Ouch.

posted by guest

Mar 16, 2008 7:26PM

http://www.businesswire.com/portal/site/home/index.jsp?epi-content=NEWS_VIEW_POPUP_TYPE&newsId=20080316005053&ndmHsc=v2*A1205665200000*B1205734890000*DgroupByDate*J1*N1010492&newsLang=en&beanID=1024816846&viewID=news_view_popup

posted by guest

Mar 16, 2008 7:27PM

End of all problems - Fed is in-charge now! They will own all the sub-prime! Dealers managed to convince them after all!

:-) Long live capitalism!

posted by Bulging Bracket

Mar 16, 2008 7:31PM

Dammit - I'll pay $3 for the building! Credit markets are working, right? Right? Right?

Wow, so $2 a share eh? Sucks to be a BSC employee. And now the game of musical chairs just gets that much worse!

posted by Anal_yst

Mar 16, 2008 7:34PM

I expect to see a pic of BSC on www.doingitwrong.com very shortly, wow...

posted by diablo

Mar 16, 2008 7:35PM

$2 in a JPM shares is like saying BSC just went bankrupt without the legal formalities. Ouch!

posted by mrpink

Mar 16, 2008 7:38PM

Dial on in boys:

JPMorgan Chase will host a conference call today, Sunday, March 16, 2008, at 8:00 p.m. (Eastern Time) to review the acquisition of Bear Stearns. Investors can call (800) 214-0745 (domestic) / (719) 457-0700 (international), with the access code 614424, or listen via live audio webcast. The live audio webcast and presentation slides will be available on http://investor.shareholder.com/jpmorganchase/presentations.cfm under Investor Relations, Investor Presentations. A replay of the conference call will be available beginning at 11:00 p.m. (Eastern Time) on March 16, 2008, through midnight, Monday, March 31, 2008 (Eastern Time), at (888) 348-4629 (domestic) or (719) 884-8882 (international) with the access code 614424. The replay also will be available on www.jpmorganchase.com.

posted by Random Banker

Mar 16, 2008 7:40PM

Oh momma the BSC employees should have just pooled together their assets and bought the fucking thing.

posted by AJ

Mar 16, 2008 7:41PM

Conference call should be fun!

posted by Anal_yst

Mar 16, 2008 7:46PM

You think they actually screen people when you register for the online webcast/presentation?

posted by guest

Mar 16, 2008 7:48PM

The on-hold music for the con-call is especially soothing... I might have to grab my Strat and solo along...

--Schmooze

posted by guest

Mar 16, 2008 7:49PM

No screening for the internet portion of the con-call...

--CS

posted by RamblinWreck

Mar 16, 2008 7:50PM

I think "O Fortuna" would be a bit more fitting for hold music, given the current situation...

posted by diablo

Mar 16, 2008 7:50PM

The Fed just announced that Primary Dealers can start borrowing from the discount window now. Who's next?

"The Federal Reserve reduced the rate on direct loans to commercial banks by a quarter-point and said it will allow primary dealers to borrow at the rate in exchange for a ``broad range'' of investment-grade collateral."

http://www.bloomberg.com/apps/news?pid=20601103&sid=a5MdIqIevEW0&refer=news

posted by guest

Mar 16, 2008 7:52PM

Chord progression for the current piece is B-A-E-F#.

posted by big r

Mar 16, 2008 7:52PM

nope i just got in easy

posted by RamblinWreck

Mar 16, 2008 7:54PM

Any guesses as to whether or not disgruntled shareholders/employees are going to (attempt to) share their minds about the $28 haircut from Friday's close?

posted by big r

Mar 16, 2008 7:57PM

the fed is backing the buy they dont give a crap about shareholders at this point

posted by guest

Mar 16, 2008 7:57PM

This last one is not bad... I can pretty much play Skid Row's Youth Gone Wild over top of it...

--CS

posted by AJ

Mar 16, 2008 7:58PM

They usually won't screen on the call either, unless you try to ask a question

posted by guest

Mar 16, 2008 7:59PM

There will be a shareholder lawsuit, right?

posted by Anal_yst

Mar 16, 2008 8:00PM

Ha Youth Gone Wild would be sweet, maybe a little Scorpions' 'Winds of Change' would be appropriate too

posted by guest

Mar 16, 2008 8:02PM

Looks like they love it
SPM8 -12.80 to 1280.20
DJM8 - -92 to 11892
JYM8 - 97.68 off 1.07

posted by guest

Mar 16, 2008 8:03PM

is anyone on the conference call. I am but all I hear is the hold music

posted by guest

Mar 16, 2008 8:04PM

Had a bit of a bastardized More Than A Feelin' going on with that last one.

posted by RamblinWreck

Mar 16, 2008 8:05PM

Aww yeah, here we go...

posted by guest

Mar 16, 2008 8:05PM

Woo, here we go!

posted by guest

Mar 16, 2008 8:07PM

levels holding like wet paper towels..thin volume but horrible action as DJM8 printed a high of 12,124 (+1.2%) post fed announcement

UGLY

posted by guest

Mar 16, 2008 8:14PM

If there is a PPT - we will see them tonight and in the morning - this is the dance they're rumoured to exist to bust.

posted by guest

Mar 16, 2008 8:16PM

That's $2 more than I thought the shareholders would get.

posted by diablo

Mar 16, 2008 8:20PM

Is it true that JPM can dump up to $30 billion of BSC's "less-liquid assets" on the Fed as part of this transaction? What does the Fed supporting those $30 billion mean?

posted by Random Banker

Mar 16, 2008 8:22PM

lol who was the clown on the call with first question from some marketing firm...? Did anyone else here that? He asked if Bear would still be buying office supplies or something...

posted by John Carney

Mar 16, 2008 8:24PM

We're on conference call and live-blogging it right now.

posted by guest

Mar 16, 2008 8:25PM

So Bear's counterparties are guaranteed, but not its senior debt holders?

Which category do money-market funds holding Bear CP fall into?

posted by Anal_yst

Mar 16, 2008 8:25PM

Anyone else not satisfied at all with the explanation between the difference of last reported book value ~$80/share and the transaction price?

posted by big r

Mar 16, 2008 8:28PM

guy mozkowski (sp?) gets 8 questions and everyone else gets 1. mad respect.

posted by big r

Mar 16, 2008 8:28PM

anal_yst, its not like their gonna say "well theres no actual value to bsc so theyre lucky they got $2"

posted by RamblinWreck

Mar 16, 2008 8:31PM

Bam! Disgruntled shareholder!

posted by Anal_yst

Mar 16, 2008 8:32PM

haha fair enough Big R, I love how they shat on that individual investor that got on the line

posted by guest

Mar 16, 2008 8:32PM

march euro rips through 15800

posted by guest

Mar 16, 2008 8:35PM

I have a feeling this thing is far from over. Wait for shareholders revolt. This happened too fast.

posted by guest

Mar 16, 2008 8:37PM

any guesses on what happens to JPM's share price tomorrow ? Or for that matter, BSC ?

posted by big r

Mar 16, 2008 8:49PM

carney - nice job w the weekend forum for this. once again keeping DB readers ahead of the curve

posted by John Carney

Mar 16, 2008 8:52PM

Thanks are due to all of you, really. This forum has been spectacular this weekend, and way ahead of the newspapers on all of this. Way to go guys.

And thanks again.

posted by big r

Mar 16, 2008 8:55PM

lets hug it out jc

posted by guest

Mar 16, 2008 9:11PM

BSC trades above $2 tomorrow.
No way this deal will get approved by BSC shareholders. And BSC is just buying time.

posted by guest

Mar 16, 2008 9:30PM

dollar not doing well....march euro now trading 158300

posted by guest

Mar 16, 2008 9:35PM

Are JPM IB employees safe?

posted by Investorcluzo

Mar 16, 2008 9:40PM

damn, went to a dinner party and missed the 'effing call. you guys gotta give me more love than this, I need the scoop and don't want to wait until 11 for the replay...as far as the $2 sale price, just look what the revolt tactic is doing for jon wood and the rest of cfc shareholders. they'll be lucky if kenny boy down in charlotte doesn't lower his bid after seeing the $hit show this weekend. seriously, $216 million? bofa's paying $5 billion...someone's getting screwed here. also, what's going on with the 25 basis point cut. I thought 75 bps was priced in. should we infer that they're going to cut another 50 on tuesday? does that make sense, might as well have done the whole damn thing tonight. I have a feeling cramer going to yell again tomorrow.

posted by guest

Mar 16, 2008 9:42PM

JPM IB employees? Give me a break. What about BS employees.

posted by HurtByAmeriquest

Mar 16, 2008 10:03PM

I hear that handcuffs are being ordered as we speak. Can you say insider trading? RICO violations and much much more...The worst/best is yet to come.

lol :)

http://www.msfraud.org/forum.htm

posted by Anal_yst

Mar 16, 2008 10:03PM

Cluzo, check the webcast

http://investor.shareholder.com/JPMorganChase/presentations.cfm

posted by guest

Mar 16, 2008 10:07PM

someone already made up t-shirts...

http://www.zazzle.com/ducks1222/products

scary times ahead

posted by guest

Mar 16, 2008 10:18PM

My husband works for a Subsidiary of Bear stearns, what do you all think will happen to them? Will they be affected?

posted by guest

Mar 16, 2008 10:22PM

Investorcluzo if you read carefully the Fed didn't cut the Fed funds rate, they cut the discount rate and opened a new liquidity facility (starting tomorrow) that includes primary dealers. The Fed will still cut 75 on Tuesday

posted by guest

Mar 16, 2008 11:22PM

email just went out to bs employees on blackberry - salaries and vacations being kept the same, no word on job cuts. we're assuming that most in pb will be safe but the operations center in metrotech will be shut down during the next few months.

anyone hear anything about the prop business?

posted by guest

Mar 17, 2008 12:15AM

Of course...I just got hired as an analyst in operations. Of course it isn't as bad as the people who have been there for years...but I don't know what to do now.

posted by mrpink

Mar 17, 2008 12:55AM

Congrats gents...

Now, it's time for me to have some pepto bismol, swallow an arsenic pill... and lay down for bed.

-mrp

posted by guest

Mar 17, 2008 2:02AM

Anyone hear about how BS/JPM will attempt to retain the current PCS institutional and brokers?
Also: To what extent will the various BSAM traditional and alternative investment strategy (HF) offerings be able to be continued under the new combined company?
Or will they be closed down and liquidated?
And to what extent does JPM have any PCS "alternative investment strategy" offerings which they are offering to their current and will be able to offer to their new (from BS) wealth investor clients?
I heard they'll pay current BS PCS brokers a guarantee of 80% of past 12 months for next 12 months - but I presume that it will be vary depending on broker's longevity at BS and the broker's total gross during past 1, 2, 3 and from inception to date gross ...
Obviously, Bear is known for it's very liberal high payout for production over $400,000 or 500,000. Thus, the current net payout to brokers could be temporarily increased (for next 6 to 12 months - payable if still employed after 14 months, for example) to incentivize brokers to stay at least a full 12 months.
Just street talk...
but, in any event, what's in it for current brokers to stay?
After all the real value of the employee assets of a sales firm are the salesforce. And they need to want to stay.

posted by guest

Mar 17, 2008 2:13AM

Just wondering ... Has anyone heard any comment from ACE GREENBERG during any of this implosion (or has the poor guy been sedated and put on life support somewhere???)

posted by guest

Mar 17, 2008 2:14AM

Open Offer to Jimmy Cayne -- looking to unload that little "pied a terre" you bought at the Plaza last week? I'll pay you $2/square foot and throw in a dime bag ...

(yeah, yeah ... you might have thought of it, but "I" am the one who made the offer)

posted by guest

Mar 17, 2008 2:24AM

Geez. So, perhaps we should hit a bunch of Chase ATMs and start pulling our accounts and moving them to Citi (or our mattresses?) Not sure I like JPM getting involved with this mess no matter how cheap they bought it for.

posted by guest

Mar 17, 2008 2:34AM

Am I the only one who is curious about how many of the current senior corporate executives of BS will get "golden handcuffs or parachutes", retirement or deferred comp dollars or shares of BSC stock benefits (like a bunch of options on high priced BSC shares) or some similar "reward" for their loyal and profitable years of employment and service to the employees and shareholders of BS?
it will be interesting to see who does the research on who bought all the out of the money puts and sold all of the out of the money calls during the huge voolume increase of these past few weeks as the "rumpors" became quite accurate and by expiration only days before they were bought (or sold) became significantly profitable.
Any guesses as to the number of persons who will be given pink slips:
during the remaining 2 weeks of March?
by the end of 90 days and completion of the merger?
at headquarters?
at the branch level?
Which departments?
Revenue Producers
PCS?
or
Institutional?
or operations
or ?
Curiosity:
How many of the big employee insider shareholders bought, acquired and or held their BSC long stock position ON MARGIN?
How many institutional, hedge funds or individual speculators bought and or held BSC shares on margin?
or were net short put options?

posted by guest

Mar 17, 2008 2:40AM

copy and paste from aol.com
Lewis (Joseph) 11.05 M 975.47 M — 9.36% Low
Cayne (James E) 5.84 M 466.30 M — 4.94% Low
Schwartz (Alan D) 1.03 M 90.86 M — 0.87% Low
Glickman (Carl D) 294,969 26.44 M — 0.25% Low
Spector (Warren J) 78,469 11.80 M — 0.07% Low
Molinaro (Samuel L Jr) 49,423 7.43 M — 0.04% Low
BNP Paribas Arbitrage SA 81,960 7.23 M — 0.07% High
Novelly (Paul A) 33,534 2.68 M — 0.03% Low
Greenberg (Alan C) 16,818 1.48 M — 0.01% Low
Williams (Wesley S Jr) 3,500

posted by guest

Mar 17, 2008 9:48AM

In the High Irony category: ~10 years ago Bear bought the design of their new building from Chase (octogonal shape); 10 years after Chase has to buy back their "Logo building" with all the undervalued assets.

posted by guest

Mar 17, 2008 10:22AM

Is this blog site no longer available?

posted by guest

Mar 17, 2008 10:23AM

Is this blog site no longer available?

posted by guest

Mar 17, 2008 10:23AM

Is this blog site no longer available?

posted by John Carney

Mar 17, 2008 11:27AM

We're up. Technical difficulties that we hope to straighten out momentarily.

posted by guest

Mar 17, 2008 12:55PM

Hi Guys - nice blog and thanks to all for continuing it. Any insiders know what the time line will be like for Bear to be integrated into JPM? Where will possible cuts be and will it be more so at the analyst level or the VP n higher levels? Are people working on deals they were part of in banking?

posted by guest

Mar 17, 2008 1:47PM

If MetroTech is closing down, what about the operations center in Whippany? That is where they do clearing and business continuity planning.
Thanks,

posted by guest

Mar 17, 2008 4:50PM

Why are they still trading the stock. Now it is double what JPM paid for it. How is this going to play out?

posted by guest

Mar 17, 2008 5:49PM

jpm was chosen as the "knight" because they're the only company with a balance sheet to support this nonsense.

i am 100% convinced that the government threatened to pull the paddy wagon up in front of bear's headquarters if they didn't submit to the will of goldman sachs and jp morgan.

gross.

posted by guest

Mar 17, 2008 5:56PM

The manner on intervention in the financial market is only making the downturn slower and more painful (some say this means orderly). It won't be over until we see blood in the streets. Bear is certainly not the end. There are more rumors going around and 100 bp cut by the fed and potentially decent earnings from gs will make people forget for another two weeks.

posted by guest

Mar 18, 2008 12:07PM

This greatest irony of all is that Bear Stearns built its franchise on shaky real estate investments that proved toxic and yet, at the end of the day, their only hard asset is 383 Madison...

posted by guest

Mar 29, 2008 7:34PM

This blog is dead. Might as well wrap it up and take it offline, webmasters.

posted by guest

Mar 31, 2008 1:16PM

James Alpha Management LLC is down 27% in a month and a half (from inception...)

posted by mhaise

Apr 01, 2008 4:57PM

I believe Bear Stearns will make a come back. I believe if they let it go to Jp Morgan so easily they will give up a proven company for a cheap cost. Times get hard, but believe in your product (industry) and people will start to believe also

posted by guest

Apr 08, 2008 5:02PM

Stumbled over this blog. Are you Bear Staerns folks who lost your jobs.
We are looking for good, solid people to work with us in farious international project. We are looking for experienced (not arrogant / perception distorted) proefessionals. We are also looking for commodity and money market trades that are ready , willing an able to be part of a gloabl group to be launched not before long.
If this is the right group here please e mail us at:
ai.group.verification.validation@gmail.com
If this is the wrong forum please accept my appologies.

posted by guest

Apr 11, 2008 8:46AM

Check out this YOU TUBE CARTOON of the Federal Reserve and JP Morgan Gobbling up Bear Stearns. via PAC MAN!!!
http://www.youtube.com/watch?v=mz3MNk24nWw

posted by guest

Apr 14, 2008 2:14AM

I posted a few weeks ago. "The manner on intervention" I will happily say that my post is coming true. Get ready for the next two weeks, all of you who nicely forgot about credit issues are in for a rude awakening.

posted by guest

Apr 16, 2008 2:20PM

Hi guys,
do you know something about the Bear layoffs? have not heard of anybody being fired so far at least in London.
Traders were interviewd by JP Morgan yesterday.

posted by guest

Apr 19, 2008 10:10AM

Hey guys could somebody give me a hand to find a job, a good recruiter in the financial indsutry. I lost my job. So basically what I need is a hand job
to relax.

posted by guest

May 10, 2008 3:08PM

Message to all Bear Stearns People.

When you think about the "injustice" of losing your job..think about the smirks on your faces after you spent a long week selling garbage securities to teachers pension funds. Think about how much fun it was to never have to do a real days work, instead just shuffle money around with a computer. Think about how while in school you avoided educating yourself in any real fashion because it wouldnt make you a fast buck.
Think about that..and think that where you really belong is in jail for what you foisted upon the world.

posted by guest

May 10, 2008 11:56PM

May 10 at 3:08PM, I am very curious to know exactly what it is that you do, seeing as how you have no idea what you're talking about in this situation.

posted by guest

May 11, 2008 11:03PM

Yes, May 10 at 3:08 PM - I too would like to know what you do - most of those at Bear that will be laid off are back-office support staff, making 30-40k year in expensive cities like NY. Do they belong in jail?

posted by guest

May 22, 2008 6:22PM

May 10 at 3:08PM
Thank you for not even attempting to construct anything that could be considered a reasonably thought out argument. Though I will be gentle as you clearly extremely bitter about the fact that the most heard thing out of your mouth at work is “would you like fries with that?” I pray to Shiva that are already or are rendered sterile in the near future because the thought of someone like yourself reproducing is just too much to bear. Now kindly scurry back under your rock and remember, you are a failure at life.

posted by guest

Jun 03, 2008 7:17PM

Hello,
I am a novice investor. I bought some BSC stock. Now that they have been bought by JPMorgan, is the BSC stock worth anything?

posted by guest

Oct 20, 2008 4:10AM

Dude above me.

You're screwed the stock isnt trading anymores and LEH went out of business then MER was taken over by BAC I meen so much has hepend sence you're post I dont no were to begin except... sell. sell everything! sell your your nuts into slavery to amazon woman who will use them for beatiful necklesses to trade for exotic spices from the far east.

SPODE

posted by guest

Oct 27, 2008 7:12PM

DON'T SELL! YOU ARE JUST LOCKING IN YOUR LOSSES.