Wall Street Journal reporter Kate Kelly captured the dramatic last 72 hours of Bear Stearns ," the toughest firm on Wall Street" , in her 2009 book Street Fighters , published by Portfolio . The inglorious demise of the company with more than 15,500 employees globally , is already being raised in connection with the Brexit aftermath, one commentator saying the financial turmoil is more like the Bear Stearns slide , rather than the Lehman Brothers collapse .
Kelly told how Bear's CEO James Cayne , took to task an outside director of the company without any background in finance , after he made what he thought were constructive criticisms about board meetings, in particular long audit committee meetings.
Cayne called him into his office and gave him a " woodshed " session meaning he was disciplined , taught a lesson , in which he told the respected president of a university , he did not understand the company . Gridiron terms were used to explain the company needed a "blocking and tackling " approach , driven by minute- to- minute decisions on trading .
There was no need for long winded strategy sessions at the board level . Bear, he continued, needed to recruit good talent and remain nimble in fast moving markets. PM Malcolm Turnbull, a former merchant banker(Goldman Sachs Australia ) , often uses the expression nimble and agile to describe his government .
In Cayne's case, an "inveterate schmoozer " who regarded himself one of the rulers of the universe , he made sure he was nimble and agile by getting out of the Manhattan office swiftly and regularly by helicopter to the Hollywood Golf Course .
In Cayne's case, an "inveterate schmoozer " who regarded himself one of the rulers of the universe , he made sure he was nimble and agile by getting out of the Manhattan office swiftly and regularly by helicopter to the Hollywood Golf Course .
Heavily involved in the subprime mortgage crisis , Bear shares tanked and the business was swallowed up by J. P. Morgan under a strange deal in which the Fed provided a special bail out up to $30 billion . To avert a depression like collapse of the money market , regulators and Congress ," in the most dramatic market intervention in years , " pumped hundreds of billions of government money into companies in the GFC .
The book's epilogue contains grim details of the impact of the GFC on America in particular , devastation from which Australia was largely protected by actions of the ALP government that stimulated the economy to stop massive job losses , kept the nation's AAA rating , guaranteed the main banks and made us the standout country in the OECD . All this against the baying of the Coalition , including Malcolm Turnbull, who voted to cut the emergency measures.
By February 2009, Kelly said this was the situation in America :
* Unemployment had reached nearly 8 percent, a loss of nearly 3.6million jobs since late 2007, with a possible loss of a further 2million by end of year.
*There had been a wave of bankruptcies in the retail sector .
* The big three car makers were struggling to survive .
*Housing prices had fallen precipitously , many US suburbs were dotted with boarded up homes and closed public services .
**Many jobless citizens faced stacks of unpaid bills and lack of access to health care .
* California , faced with a $40 billion shortfall in its budget , had ordered 200,000 state workers to stay home.
*In New York , in early January, the state's online unemployment insurance system , besieged by inquiries, shut down twice in two days .
