Tuesday, March 18, 2008
Bear Stearns, Run By Meatheads?
Sorry for the poor chart. Click to enlarge.
This was the wild ride last Friday morning for Bear Stearns, an erstwhile major investment bank rumored to have "liquidity issues".
Where do you think I sold the BSC that I bought Thursday at $51.69?
Alright, I'll tell you. God forbid I tax your brains.
I sold it at $58.40 a mere 10 minutes before the spike (see the intraday chart above). I cursed myself for all of five minutes. Then after the nosedive began, I started tooting my horn. Bear Stearns closed the day at around $30 a share - well below the boundary of my chart.
Then this weekend, in lieu of filing for bankruptcy, sold itself to J.P. Morgan Chase for a whopping $2 a share.
There are plenty of other places to read and discuss the debacle. Find them on your own if so interested/ignorant.
I just wanted to offer this one little anecdote about Bear.
Now, fortunately I don't have any friends that work there. Though one of my wife's former bosses "just went to work for Bear Stearns" (it'll probably be a short-lived tenure as rumor has it that JPM is planning to reduced headcount by 50%).
But I did interview for a job at Bear about 6 years ago. In fact, the job opening was on the mortgage desk - the very desk that brought down the firm. For the interview I met with three gentlemen. The first two rounds went well, but then I met the honcho - Josh Weintraub.
This unmitigated a**hole came in, took one glance at my resume and snapped, "You're strong at math, huh?" He looked up, "What's eleven sixty-fourths of $27 million?"
I answered, the best I could off the top of my head. Then he asked me another one, and another one and another one, "What's twenty-three thirty-seconds of $61 million?". I might very well have gotten them all wrong; he was going so fast and demanding quick answers, I couldn't remember.
After this display of his superiority, he asked me a few things about my experience, patronized me some more, and abruptly left. Suffices to say, he didn't hire me, which was fine. At least I got to speak to three different people. I've had more frustrating job hunting experiences where the interviewers didn't even ask me a single question. I've also had my time wasted by job postings and interviews where there was clearly never an intent to hire anyone.
Supreme arrogance is not something that I can't handle - thanks to six years in a trading pit with lowest multi-millionaire scum of the earth. But what irritated me about Josh Weintraub was that he could see my math creds and my pit-trading experience yet he deliberately tried to fluster me. So he was fluent in sixty-fourths of large numbers - I bet if I asked him what 7 7/8 - 2 11/16 + 5 1/2 - 13/16 was, he wouldn't be able to compute so rapidly or accurately. (At the time, that would be the quick math an option floor trader would be proficient at.) The fact is, nobody can do the rapid computation right away - it takes practice. To put it mildly, there is nothing about my Olympian math credentials that should ever make another human being question my quantitative abilities.
My pachydermal memory may have even forgot this egomaniac if I hadn't 1) seen him in Trader magazine recently and 2) been thinking about Bear Stearns amidst it's demise.
The Senior Managing Director of Mortgage-Backed-Securities recently flexed his ego and muscles at some Wall Street charity boxing event. Good for him!
Now, let me ask you a question: From a profiling standpoint, does this big shot look like a savvy, intellectual who's competent to to be juggling billions of investors monies?
Or does he look (and sound) like some Cro-Magnon, meathead footballer you hated in high school?
They say that 30% of Bear Stearns' stock is owned by its employees.
Here's hoping that Josh Weintraub was arrogant and stupid enough to own just a few too many shares. I should email him,
Hey Josh, real quick, no paper, what's eleven sixty-fourths of your personal net worth?!?!?!
In all frankness, with the billions of losses Bear posted in 2007 and all the lost brokerage assets (starting in August), why the heck didn't Bear fire its head of MBS Trading?
Because he could box?
Sure, it must have been someone else's fault.
If you think I am being pretty harsh on a guy based on some 5 minute interview years ago, then you are probably right.
Though, in fairness, he was gratuitously rude to me back then.
And, if you find my schadenfreude towards a guy who likely helped obliterate the net worth of 14,000 of his co-workers (not to mention shareholders) to be a little overdone, than you ought to head over to the comment threads of Calculated Risk.
The denizens of that blog have an unsettling fetish for the misery of others.
I drop in there once in a while just to make myself feel charitable.