The Danger from Bear Stearns New CEO

Wednesday, January 09, 2008 | 11:06 AM

Scarsdale Equities holds a regular luncheon, immortalized in the book The Money Game. I am privileged to occasionally break bread with the interesting group of traders, thinkers and fund managers assembled by Rudy Beutell.

I received an email this morn reminding me of my own comments to the group back in August 2007. A NYT article on Bear Stearns -- Extrication Time at Bear Stearns -- must have jogged the memory.

I thought it was worth sharing. Over the summer, I had said:

“Just wait until Jimmy Cayne gets dinged out of Bear Stearns. The new CEO will look at all the junk on the books – problems he had nothing whatsoever to do with – and likely say ‘Get all this shit off of my books. All of it. I don’t care what it cost, I don’t care what its worth, I want all this garbage outta here.’

That's only the beginning. There's a danger is that these sales will further reveal the mark-to-model as the fairy tale it is. Even more ominous, it will force other houses carrying this junk to price them realistically.  That could lead to some even larger write downs then we have seen so far.

I suspect that the finance sector still has lots of work ahead of it . . .




Extrication Time at Bear Stearns
NYT, January 9, 2008

Wednesday, January 09, 2008 | 11:06 AM | Permalink | Comments (16) | TrackBack (2) add to | digg digg this! | technorati add to technorati | email email this post



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Listed below are links to weblogs that reference The Danger from Bear Stearns New CEO:

» Will Bear Stearns "Clean out the Garbage?" from A Dash of Insight
As usual, Barry Ritholtz has been setting the table with a number of interesting questions. We shall try to catch up. Today he points out a forecast he made months ago about a possible transition at Bear. Here is the [Read More]

Tracked on Jan 9, 2008 10:50:57 PM

» When Banks and Investment Houses Dump Bad Assets from Businomics Blog
Barry Ritholtz over at The Big Picture has a good insight into the new guy at Bear Stearns. Last summer he anticipated a change in senior management and said this:“Just wait until Jimmy Cayne gets dinged out of Bear Stearns. [Read More]

Tracked on Jan 9, 2008 11:16:43 PM


Watch Mer and C for what comes they already have new CEO's. BSC won't get a clean bill until Cayne is out for good.

You can't piss on the chairman in public...


Posted by: michael schumacher | Jan 9, 2008 11:16:56 AM

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