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.