Any Wall Street veteran worth his salt knows that the most important weapon with which to line his arsenal is a fall guy. Inevitably he’s going to fuck enough shit up that someone’s going to have to get fired and wouldn’t it be a shame if it were him? Holding senior execs accountable for their own gaffes and pratfalls would be as patently absurd as Goldman’s prop desk just up and deciding to stop front running clients. Luckily, former Bear Stearns CEO Alan Schwartz knows of this rule, and is planning on buddy system’ing it up at his next gig. The Post reports that Schwartz will be taking erstwhile Bear MD Richard Metrick with him upon leaving Bearpont Morgan Chase in August. The duo doesn’t know exactly where it’s going, but is said to be mulling offers from Citigroup, Goldman Sachs, Warburg Pincus, and KKR. Other requirements Schwartz rumored to be putting in his next contract are included but not limited to immunity following the takeover of whatever firm he takes down, and peanut butter M&M’s.
Bear’s Schwartz Mulling Job Offers [NYP]
Charlie Gasparino reports that former Bear CEO Alan “We’ve Got Liquidity Coming Out Of Every Orifice” Schwartz will leave Bearpont Morgan Stearns at the end of the summer. Schwartz has apparently been “working on some deals” at Bearpont, but decided–as did senior executives at the firm– that the fit wasn’t quite right. According to Gasparino, Amphibious Al has not yet decided what to do next, though a small boutique firm, major bank (please say Lehman), and private equity shop are all in the hopper.
Earlier: Alan Schwartz Declining Offer From JPMorgan Cayne?
When the history books (by which we mean Charlie Gasparino’s, When Mooks Fail) look back at the fall of Bear Stearns, there will be a lot to lambast BSC management over. A lot. A whole lot. There will be one thing we can thank them and Jimmy Cayne’s thrice daily caramel macchiato habit for, however, and that is three less purveyors of vanilla bullshit latte cappa things. Last Friday, Starbucks officially issued a list of the 600 stores it will be closing over the next several months. Half of six Manhattan locations scheduled to be shuttered are located within two blocks of the dearly departed Bear Stearns 383 Madison Avenue headquarters. Will the oft patronized head shops, Frito distributors and providers of the Magic Eye posters in the area be affected as well? We’ll just have to wait and see.
Starbucks Closes 600 Stores. Will US Economy Survive? [American Madness]
We’re a bit of a one-trick pony around here today, fighting the good fight against all those nasty speculating reporters and bankers claiming rumors are having damaging effects on the market. But it’s getting late in the day. Bank of America is still pretending it doesn’t need to cut its dividend. Merrill still won’t admit it needs more money, but its stock dropped 9% today. Lehman’s down 11% on now news. (Somebody catch those rumor mongers!) Freddie and Fannie are off 24% and 13%. Why should we bother even pretending anything else we could cover is this much fun?
Charlie Gasparino has now written about his investigation into the market manipulation story. He’s got a personal axe to grind because he’s been named in some of the stories as one of the villains at CNBC whose rumor mongering brought down Bear Stearns.
But as Gasparino shows us: the timing doesn’t work out for the conspiracy theorists. Two hedge fund managers he talked to were pulling their funds out of Bear Stearns long before CNBC started reporting that Bear Stearns investors and customers were concerned about the firm’s liquidity and future business prospects. So the rumors of a run on the bank only really got started after the run was off and, well, running. Meanwhile, the executives at Bear were denying anything was going on.
In short, those nasty rumor mongers were more trust-worthy than the Wall Street executives who either lied or didn’t know that their customers were headed for every exit they could find.
Gasparino: The Right Question for Bear Stearns[CNBC]
Many of you were outraged at the comment made by Bearpont Morgan CEO Jamie Dimon to Charlie Rose that the SEC should investigate the “smoke” surrounding the fall of Bear Stearns, because the mixture of gases and suspended carbon particles supposedly suggests that not only was Jimmy Cayne getting high at the office, but that there may have been a “deliberate and malicious destruction of value” caused by the creation and spreading of a rumor about BSC being in trouble. And, if there’s conclusive evidence of guilt, that those parties should go to prison, and not pansy-ass white collar resort prison for a two month stay but federal pound-me-in-the-ass prison for a very long time. We’re pretty sure Dimon was referring to the so-called evil shorts who a lot of people would like to believe were behind Bear’s demise and not CNBC, but nonetheless would be remiss not to bring this call to put network contributor Dennis Kneale behind bars to your attention. Oh, and here’s a vintage clip of the perp fighting with Charlie Gasparino over whether or not he uses hookers. Just ’cause we love you.
So Bearpont Morgan Chase CEO Jamie Dimon was on Charlie Rose last night talking about the purple pot smoking elephant in the room and even though it would’ve been a lot cooler if Dimon had gone on Inside The Actor’s Studio instead, it was still a pretty interesting interview. They talked about the $2, staying up all night, the Fed and so on and so forth. Of note to some was the fact that Dimon said that those responsible for BSC’s fall should go to prison “for a long time,” but that wasn’t the most shocking aspect of the sit-down.
Toward the end of the interview, when things were getting loose, and Rose was comfortable enough to start asking unprofessional questions (ex. “Have you ever taken steroids?” “Have you ever killed a person?”), the conversation turned to looks. Seemingly out of the blue, the interviewer asked the interviewee, “Forgetting out balance sheets, and exposure, and all that shit, who is the hottest piece of man meat on Wall Street?” After registering some initial shock at the question, Dimon answered “Blankfein,” with a confidence that suggested he’d thought about this before. There’s no accounting for taste and beauty is subjective, so one would’ve assumed that Rose would accept the answer and move on to a follow-up question (“Have you ever thought about taking things with LB to the next level?”) but oddly, he bellowed “No! Wrong answer. Try again.”
Confused but game, Dimon offered “Pandit?” Apparently this was wrong again. For the next ten minutes, Rose proceeded to shoot down every name offered by JD until, in an apoplectic fit, Rose screamed “Mack, god damn it, the answer is Mack! Not Blankfein, MACK. Not Pandit, MACK. Not Fuld, MACK. No one really knew what to make of the thing, and it sort of seemed best to just act like everything was normal so nobody got hurt. Today, though, we’ve uncovered the reason behind Rose’s bizarre and Rain Man-esque partiality toward the Lebanese Lothario. And, not to start a baseless rumor, a possible collusion between The Charlie Rose Show and Morgan Stanley that, when the smoke clears, we’ll be able to point out as the reason for the (impending) implosion of JPMorgan.