The "Chutzpah" of Bear Stearns
"Chutzpah" (חֻצְפָּה) is a Yiddish word. It is defined as brazen audacity to the nth degree. It is used to describe someone who has over-stepped the boundaries of accepted behavior with no shame.
The Joys of Yiddish gives it an even more visceral definition: "gall, brazen nerve, effrontery, incredible 'guts,' presumption plus arrogance such as no other word and no other language can do justice to."
The classic example is someone on trial for murdering both their parents, who asks the court for leniency because they are an orphan.
David Malpass is chief economist at Bear Stearns. In an astonishingly inappropriate Op-Ed piece in today's WSJ, Mr. Malpass argues that all is well in the economy, the credit crunch is contained, and Main Street remains totally unconcerned about this.
Talk about Chutzpah.
If there is a more imperfect messenger for telling everyone to "please calm down" than ANYONE from Bear Stearns, I am at a loss to imagine who that might be. Even more ironically, on the same day we read this absurd Op-Ed, we learn that Bear Stearns has decided to liquidate those two (with a possible 3rd on the way) bankrupt hedge funds in the Cayman Islands -- instead of New York, in order to limit creditors'/investors' ability to get their money back.
More Chutzpah.
I haven't even gotten to the substance of the piece, which is -- let me blunt here -- idiotically child-like in its bad facts and poor arguments. It is so weak that it relies on the Conference Board's backward looking, ill thought of sentiment measures, and conveniently ignores the more recent WSJ/NBC poll, which shows two thirds of Americans believe we are already in a recession or will be in a year.
Nothing to see here, move along, move along.
Any analysis -- and I hesistate to use that word -- which claims "Neither the economy nor job growth has been dependent on housing" is simply a case of reductio ad absurdum.
Beyond Chutzpah.
~~~
I've been on K&C enough times with Mr. Malpass to know that he is a bright guy who is not so totally blase about reality. I bet that the idiotic idea for this steaming pile of manure came from way higher up the Bear Stearns food chain. I'll bet he ground his molars down while writing this garbage.
Jimmy Cayne must really want to keep his job in the worst way . . .
>
UPDATE: August 7, 2007 9:34 am
Interesting conversation about Bear Stearns with a friend who left there years ago: When discussing why this came from Bear Stearns, instead of from Goldie or Morgan or Mother Merrill or even UBS -- recall that Bear Stearns -- LTCM's clearing firm and prime broker -- was the only major Wall Street firm that refused to participate in the NY Fed orchestrated (but Wall Street funded) bail out.
The book When Genius Failed: The Rise and Fall of Long-Term Capital Management goes over the details of Bear's relationships to the rest of the Street. Had any other firm asked a competitor to publish a similar piece, it would have been greeted openly. I assume Bear didn't even ask, but if they did, they would have been told to go jump . . .
>
Sources:
Don't Panic About the Credit Market
DAVID MALPASS
WSJ, August 7, 2007; Page A11
http://online.wsj.com/article_print/SB118645120890190059.html
Bear Stearns Caymans Filing May Hurt Bankrupt Funds' Creditors
Jeff St.Onge and Bill Rochelle
Bloomberg, Aug. 7 2007
http://www.bloomberg.com/apps/news?pid=20601087&sid=awRQv0XawGk0&
America's Economic Mood: Gloomy
JOHN HARWOOD
WSJ, August 2, 2007; Page A4
http://online.wsj.com/article/SB118600572789185278.html
Tuesday, August 07, 2007 | 07:16 AM | Permalink
| Comments (45)
| TrackBack (3)
add to de.li.cious | 
digg this! | 
add to technorati | 
email this post
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef00e39823dcc58833
Listed below are links to weblogs that reference The "Chutzpah" of Bear Stearns:
» Panic, Housing, and the Economy: Ritholtz versus Malpass from A Dash of Insight
A current theme at A Dash is how people can use various sources of information in doing their homework. Inevitably, we must all make choices about what to read and how to use the information. We are working on some [Read More]
Tracked on Aug 7, 2007 10:48:58 PM
» Let the litigation begin! from The Big Picture
Thus, It Begins: I believe Barclays is now the first big plaintiff against the major Wall Street brokerage houses. The United Kingdom bank was burned this summer when they lent $400 million to the firm's funds, whose collapse wiped out $1.6 billion in ... [Read More]
Tracked on Dec 20, 2007 6:56:01 AM
» Who is to Blame for Bear Stearn's Demise? from The Big Picture
From our Things that make you go Hmmmm department: There is a meme going around about the death of Bear Stearns (BSC). According to some people (mostly current and ex-employees) the collapse of the fifth largest investment bank in the US is the fault o... [Read More]
Tracked on Mar 21, 2008 10:26:56 AM
Comments
Barringo,
To my mind, here's your Monday rally trigger:
http://finance.yahoo.com/q/bc?s=NFI&t=1d&l=on&z=m&q=l&c=
http://finance.yahoo.com/q/bc?s=%5EDJI&t=1d
Posted by: Eclectic | Aug 7, 2007 8:20:58 AM
Excellent post Barry...I've had similar thoughts about Lehman's Drew Matus over the last month or two. Even though Lehman keeps coming up high on the subprime exposure list he can't seem to get enough air time to explain all the reasons why things are going to be just fine.
Posted by: Sven | Aug 7, 2007 8:24:03 AM
Barry, is there a Yiddish word for "criminal"?
Posted by: Strasser | Aug 7, 2007 8:48:16 AM
Yiddish criminal = farbrekher
Posted by: ari5000 | Aug 7, 2007 9:00:34 AM
Reminiscent of Powell before the UN.
Posted by: Bill | Aug 7, 2007 9:11:55 AM
I believe this is the Yiddish word for Bear Stearns Hedge Fund Investors: Shtuped.
Posted by: Winston Munn | Aug 7, 2007 9:16:29 AM
Ever new story I read about BS they are attempting political and financial suicide. Is the old man senile?
Posted by: Kp | Aug 7, 2007 9:23:29 AM
And they said the Wall Street Journal wouldn't lose any integrity with Murdoch as owner...
Granted its an Op/Ed piece, but it shouldn't be published.
Posted by: Josh | Aug 7, 2007 9:27:08 AM
Josh, the WSJ editorial page is the worst sewer on the planet . . . even Murdoch couldn't demean it further (and he hasn't taken control yet).
Malpass is a putz, and Paul Gigot is the anti-mensch.
Oy gevalt! Is Malpass reduced to playing the David Lereah of Bear Stearns?
Posted by: Gary | Aug 7, 2007 9:44:01 AM
from what I've heard Cayne could'nt let his golf game be bothered by any of the goings on at BSC......really why they waited until this last weekend to fire the fool who was responsible for the two funds....oh sorry he resigned......sure he did.
Total Hubris and yet another reason to make you're own decisions regarding your money.
Ciao
MS
Posted by: michael schumacher | Aug 7, 2007 9:47:52 AM
The Chutzpah of S&P
The Chutzpah of Moodys
The Chutzpah of Fitch
The Chutzpah of Merrill
The Chutzpah of Lehman
The Chutzpah of JPM
The Chutzpah of Goldman
The Chutzpah of Citi
The Chutzpah of Paulson
The Chutzpah of Bernanke
The Chutzpah of Cheney
The Chutzpah of Gonzales
The Chutzpah of Bush
The Chutzpah of.........
and on and on and on.......
Posted by: Stuart | Aug 7, 2007 9:56:15 AM
BS, thou doth protest too much
Posted by: Bonghiteric | Aug 7, 2007 9:57:55 AM
For any interested, Bloomberg tv has Barry coming up on Market Pulse for an interview this morning.
Posted by: Florida | Aug 7, 2007 10:00:54 AM
It's amazing how tarnished the Bear name is now. It's clear a PR department had nothing to do with the op-ed piece, because it's clear Bear doesn't have a PR department. For the many talented people working there, it must be so embarassing to flash their business card now.
Posted by: jay | Aug 7, 2007 10:15:35 AM
I use to dislike your Blog.
Now I LOVE your Blog. Please do not ever change.
I now have a source that I can count on to either be WRONG or irrelevant. I still need to distinguish between the two, but it is so nice to have a reliable indicator like you.
Posted by: kl2005 | Aug 7, 2007 10:17:27 AM
Long memories and I bet they have even longer knives. This is going to get real interesting.
Posted by: Red Pill | Aug 7, 2007 10:20:07 AM
Barry,
Great to see you on BloomBabble this morning. I was surprised to hear you describe yourself as a quant shop that has been miserably long. You had seemed more hedged than that.
Weirdly, they had you listed as being from Fusion IQ...not RR&A or TBP.
Posted by: Sven | Aug 7, 2007 10:21:56 AM
kl2005 can you be more elaborate, please?
Posted by: techy2468 | Aug 7, 2007 10:33:33 AM
kl2005 must be David Malpass.....LOL
Posted by: Stuart | Aug 7, 2007 10:40:56 AM
False -- "two thirds of Americans think the economy is in recession" the WSJ poll you reference shows no such thing. Also fewer people think the economy is in recession now than thought it was in recession in 2003.
~~~
BR: Here is the line you misquoted: "The more recent WSJ/NBC poll, which shows two thirds of Americans believe we are already in a recession or will be in a year."
Here is the WSJ Quote: "More than two-thirds of Americans believe the U.S. economy is either in recession now or will be in the next year, a new Wall Street Journal/NBC News poll shows."
Why you would misquote this is beyond me. I guess you wanted to lose commenting privileges.
(For a more complete explanation, see Disclosures & Terms especially the section on trolls & asshats)
Posted by: JArnold | Aug 7, 2007 10:44:00 AM
Hey JArnold....
"RON BROWNSTEIN, CNN POLITICAL ANALYST:"
"Polls out in the last couple of weeks have found that the majority of Americans think the economy is in recession, think the country is on the wrong track and his approval rating for handling the economy is only in the mid 40s compared to astronomical numbers on issues of national security."
http://transcripts.cnn.com/TRANSCRIPTS/0208/11/sm.23.html
Posted by: KirkH | Aug 7, 2007 11:03:18 AM
"I haven't even gotten to the substance of the piece..." What happened, Barry? Did you get distracted? I can learn new Yiddish words on my own; what I'm REALLY interested in is having you address Malpass's statistics--and the critical double-counting issue.
Posted by: John F. | Aug 7, 2007 11:23:10 AM
Barry (on the last couple 'grafs): Got it in one. (Yes, I've been pounding that drum for a while, but it's rather one worth beating.)
Posted by: Ken Houghton | Aug 7, 2007 11:31:58 AM
"Chutzpah" is also a word to describe "Boeing 777" Ben. Ben and Paul will use everything to rescue the market and pump it higher.
Posted by: test | Aug 7, 2007 12:05:05 PM
I believe this is the Yiddish word for Bear Stearns Hedge Fund Investors: Shtuped.
There's an authentic one (well, two): meshugene kopf.
Posted by: Alex Khenkin | Aug 7, 2007 12:08:44 PM
