March 17, 2008

Après Ce, Le Déluge

STUNNED BEAR STEARNS employees report to work. Key quote: "I've been at Bear for 11 years and I want to vomit." Also, apparently some joker taped a $2 bill to the front entranceway, in reference to the firm's share price, which leads to the second key quote: "Where is the $2 bill? I might need that tomorrow!"

Among the highlights of the linked story: a clever real-estate agent who handed out his card at the door. Also, the local coffee/bagel vendor is understandably concerned.

STUNNED INVESTORS: It's time to lawyer up. Key quote: "I can't divulge privileged conversations, but shareholders don't contact me when they are happy with the way things are going with their investments."

STUNNED NEW YORKERS: Uh, this can't be good for the local economy.

STUNNED RETIREMENT PLANS: The Toronto Globe & Mail reports: "Bear Stearns employees wiped out." Former top boss Cayne's stake reportedly falls from $900m to $13m in value. That has got to suck.

STUNNED EXECS LEARN BEAR DID ONE THING RIGHT: No golden parachutes! Oddly, the Reuters story describes this as "insult to injury," although it seems more like getting "hit in the head with a crowbar."

PRESENTED WITHOUT COMMENT: Here's a report on Cramer's take on Bear Stearns.

Posted by Benjamin Kepple at March 17, 2008 04:17 PM | TrackBack

Okay, I'll admit it, I have been sleeping again. What happened with Bear Sterns? Did somebody buy it? For a very low price?

Forgive me for knowing nothing about money.

Posted by: Matt at March 17, 2008 07:21 PM

Hi Matt,

Yes, Bear Stearns is -- for all intents and purposes -- kaputski. Whether warranted or not, people lost confidence in Bear: the WSJ article (see the entry two down) spells out the whys and hows. That left Bear reeling and they were caught between a rock and a hard place: sell or file bankruptcy. So they agreed to sell themselves to JP Morgan Chase for $2 per share, which is not nothing but close to it. (A year ago, it was at like $169).

Of course, Bear's shareholders could still scuttle the deal, although I think that's pretty unlikely. There is no point in cutting off one's nose to spite one's face. Then again, they may take John Milton's outlook -- better to reign in hell than serve in heaven.

What does this mean for us? Well, two days later, it looks as if the answer is: not all that much. Still, there are a lot of people in New York who are now much poorer than they were a week ago.

Posted by: Benjamin Kepple at March 18, 2008 08:38 PM
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