Should Bear CEO Alan Schwartz Join the Other Team?Bear Stearns CEO Alan Schwartz, recently relieved of his duties, faces a conundrum. Should he stick with his scrappy team of ragtag bankers? Or join an established “cheerocracy”?
George Soros: You Ain’t Seen Nothing YetPublishing musical chairs, bad news on the economy front, and gripes about law-school rankings — all in our daily roundup.
Pimp Their Jets!You thought you had problems. Try finding someone to install a mother-of-pearl ceiling on your private jet.
white men with money
Alan Greenspan Regrets RienIn light of the recent barrage of criticism of him, and in light of the fact that Greenspan is 82, the former Fed chairman tries to defend himself against all the bad things people are saying about him.
company town
Katie Couric and Sean McManus: Chipper at CBS in Spite of It AllMore troubles for Sam Zell, Heather Mills is coming to town, and half of Bear Stearns employees are facing the ax. Click through to read the rest of our news roundup from the fields of media, law, finance and real estate.
Buyout Exodus at ‘Newsweek’A dating blogger seeks a book deal, trading desks think recession, and Jean Nouvel wins the Pritzker in our daily roundup of media, finance, law, and real-estate news.
obit
A Eulogy for the BearThis past weekend, in the wake of former Bear Stearns CEO James Cayne’s getting over the denial stage and selling out his shares in the firm, thereby clearing the way for takeover by JPMorgan, 85-year-old Bear Stearns was prepared for death with more pomp and circumstance than an Egyptian pharaoh.
Jamie Dimon, Master of the Risk-AverseDuff McDonald predicts why JPMorgan’s bid for Bear Stearns will go through — and why that’s probably a good thing.
‘Superclass’ Author David Rothkopf Submits to Our QuestionsThe former Clinton-administration trade official and author of “Superclass: The Global Power Elite and the World They Are Making” talks to Boris Kachka about the election, the economy, and why the elite won’t stop coming to New York City.
Jamie Dimon: ‘Many’ of Bear’s 14,000 Employees Will Lose JobsDid Bear Stearns collapse in part because of a whisper campaign? How will Starbucks keep its customers if everyone starts pinching pennies? And what did Sarah Jessica Parker think of Maxim naming her the “unsexiest woman alive”? Our weekly roundup of law, media, and business news.
in other news
Touching and Feeling With Jamie And AlanEveryone was feeling a lot yesterday when JPMorgan CEO Jamie Dimon met with Bear Stearns executives to discuss the changes he’ll make when and if his takeover deal of the firm comes to fruition, and a lot of what they were feeling was anger.
white men with money
The Epic Battle for Bear Stearns’ Soul, and Other Day-Three StoriesIt’s been two days since Bear Stearns was sold in a fire sale to JPMorgan, and things are still messy and emotional. Whose fault was all of this, and if it’s no one’s fault, whom can we blame? What will happen next? And what will the impact be, not just on Wall Street, but on the little people? Several stories in the papers today shed light on these questions, even as they raised more questions. Below, a handy cheat sheet to keep you current:
white men with money
The Fall of Bear Stearns: A Quickie GuideThe Wall Street Journal today has a big story walking us through the events leading up to the collapse of Bear Stearns this past week. But perhaps you haven’t gotten to it yet. It’s so large and inky, and you’ve been busy, going to meetings and calculating your annual income should you become a high-class hooker. Still, you don’t want to look like an idiot, should someone, somewhere, bring up What Happened at Bear Stearns. You will want to nod knowledgably and pontificate on how it Might Affect the Economy. Which is why, using handy bullet points, we’ve summarized how the bank’s dalliance with subprime lending, coupled with a dope-smoking CEO, finally caught up with them in a stunning week-or-so period. To keep things in perspective, we started at the beginning. The very beginning.
company town
JPMorgan Gearing Up to Move Into Bear’s Sweet HQFINANCE
• JPMorgan Chase will probably move its investment-banking unit to Bear Stearns’ smokin’-hot headquarters on Madison Avenue. The building is valued at $1.2 billion, which is just one-fourth of quadruple the price JPMorgan paid for the firm itself. [NYP]
• JPMorgan Chase’s valuation of Bear Stearns shows that financial institutions are significantly overvalued. Speaking of which, many employees had their life savings wiped out. [NYP, WSJ]
• Meanwhile Goldman Sachs’ earnings are down but beat analysts’ expectations. [DealBook/NYT]
in other news
Lehman to World: ‘And I Am Telling You I’m Not Going’
After this weekend’s deal to sell collapsing investment bank Bear Stearns to JPMorgan, market watchers were frantically scanning the horizon to see which financial firm might be next. The name on everybody’s lips turned out to be Lehman Brothers. The bank, whose profile is similar to that of Bear Stearns, was a major player in the subprime-mortgage market as of last summer, and its shares have tumbled from $82 then to $31.75 last night. It’s also the smallest of the most important Wall Street power firms. But Lehman CEO Richard Fuld aggressively made it clear yesterday that if there is in fact a domino effect among the firms, it won’t be his company that will be tumbled first. Why?
• Because Lehman learned a ton from a similar crisis in 1998, after a panic over Russian debt, and returned stronger.
• As a result, they have a much higher level of liquidity this time around. Like, $35 billion in cash and liquid assets, on top of $160 billion in “unencumbered” assets, so it can borrow more.
white men with money
World Reels After Bear Stearns Is Sold For Pocket Change“This is like waking up in summer with snow on the ground,” Ron Geffner, a former SEC lawyer, told the Times of the news that last night JPMorgan, aided by the Federal Reserve Bank, bought Bear Stearns at a shocking 93 percent discount on Bear’s Friday closing price: $2 a share, or $236 million. Including the Madison Avenue headquarters, a property valued at least $1.2 billion. It was a nice present for JPMorgan CEO Jamie Dimon, who celebrated his 52nd birthday on Thursday, but not so much for the world economy: Although the last-minute buyout was supposed to stem the credit crisis and, as the Fed said yesterday, “bolster market liquidity and promote orderly market functioning,” it seems to have done precisely the opposite. Markets in Europe and Asia tanked overnight, the dollar plunged, and trading on Wall Street is hobbled by fears of a domino effect. Today’s economic conditions are “the most wrenching since the end of the second World War,” Alan Greenspan told CNN. Fortunately, it’s Saint Patrick’s Day, so even though there’s no green circulating in the market, there is green beer. Drink up, folks. It’s going to be a long, depressing ride.
JP Morgan Pays $2 a Share For Bear Stearns [NYT]
A Deal For Bear Stearns [WSJ]
Press Release [Federal Reserve]
white men with money
Spitzer–Mortgage Industry ConnectionAmid all the vengeful glee on Wall Street, the Ashleymania, and the coverage that has accompanied Spitzer’s fall, one aspect of the story has been underexplored, according to journalist Greg Palast: Could the Lonesome Gov’s fall have had something to do with the Fed’s $200 billion bailout of the subprime-mortgage industry, which Spitzer conspicuously opposed and which coincidentally occurred on the same day as his resignation? It was a federal investigation which uncovered Spitzer, Palast points out, and his outing could be seen as unusual.
Senator David Vitter, Republican of Louisiana, paid Washington DC prostitutes to put him in diapers (ewww!), yet the Senator was not exposed by the US prosecutors busting the pimp-ring that pampered him. Naming and shaming and ruining Spitzer — rarely done in these cases — was made at the ‘discretion’ of Bush’s Justice Department.
Palast, a cult hero in underground journalism circles (he’s the winner of six “Project Censored” awards), doesn’t really unload any evidence as much as speculate at sinister motives, but it’s interesting, and better than watching Ashley’s maddeningly chaste dance moves on some scrub’s cell-phone camera. —Josh Ozersky
Eliot’s Mess [Greg Palast]
Predatory Lenders’ Partner in Crime [WP]
intel
How Eliot Spitzer Missed His Money Shot
Eliot Spitzer’s political career, gravely injured after a collision with reality on Monday, finally passed into the great unknown two days later. But Spitzerism — the soul, that is, of his career — expired months ago.
Unlike virtually every other Democratic politician in the country, Eliot Spitzer understood markets. He believed in the potential of widespread investing in stocks to build and spread genuine wealth, and as attorney general, he was like a Money magazine editor on crack, targeting enemies of small investors: self-promoting analysts, corrupt mutual-fund traders, predatory lenders. Spitzerism wasn’t about taxing and regulating profits; it was about diffusing profits to people who have never received a dividend check.
white men with money
Barry Diller and John Malone’s Court Battle Brings Back All Our Bad BreakupsLast October, when Barry Diller picked up The Wall Street Journal and saw his business partner in IAC, Liberty Media founder John Malone, sniping that although once there was a Barry Diller premium on Wall Street, “Today you could argue there is a Barry discount,” among other things, he felt not unlike Minnie Driver when she found out Matt Damon was breaking up with her by hearing it on Oprah. “How could they be that mean?” Diller whined in Delaware chancery court yesterday. “How could they be that hostile?” For two weeks, he sat around, “waiting for the phone to ring,” he said. “I expected John Malone to call me and apologize.” But the call never came. Diller’s testimony is the last in the trial that will determine the fate of IAC, and his statements yesterday underscore the fact that while Diller, Malone, and Malone’s deputy boy toy Gregory Maffei may act as though their fight is over what’s best for shareholders, this battle is personal, and that whatever the outcome of the trial, the ending to the IAC story was written long ago. Specifically, in those dark, cold months between the fall and Christmas. It was December 21, when Malone finally approached Diller, who told him: “You lost me.”
Scenes From a Marriage [Portfolio]
company town
New York Newspapers Tanking More Slowly Than Papers ElsewhereMEDIA
• Of the top twenty American newspapers, the circulation of New York ones suffered less than others over the past few years. [Mixed Media/Portfolio]
• We hear … that gossip Website Jossip.com is up for sale. [NYP]
• And that ESPN The Magazine is beefing up its fashion coverage. [WWD]
company town
Will ‘Kristen’ Get a High Rate From the Media, Too?MEDIA
• How did the New York Times get the Spitzer scoop anyway? [NYO]
• “CNN Admits: We Shouldn’t Have Used Alleged Stripper Biter As Spitzer Commentator.” [AP via HuffPo]
• Bids for an interviews with “Kristen,” the prostitute who slept with “Client 9,” are reportedly up to $100,000. [Guest of a Guest]
white men with money
CEOs Fry at Congressional Hearing!Oh, not really. We’re just exaggerating. That’s what the media does, according to former Citigroup CEO Chuck Prince, Countrywide CEO Angelo Mozilo, and former Merrill Lynch CEO Stan O’Neal,all of whom who have all offered up the line that the media has “grossly exaggerated” the amounts of their compensation in their testimony in front of the House Oversight and Government Reform Committee today. “The reality is that I received no severance package,” said O’Neal. This is technically true: but he did recieve $161.5 million in cash, stock and stock options upon his “retirement” in October. Over at Portfolio, Elizabeth Olson is live-blogging the hearing, and she has reported that, among other things, Countrywide Financial CEO Mozilo looks “tan and confident,” but everyone looks totes unhappy. The day started out with a bang: Chair Henry Waxman, who called for the hearing, wondered aloud whether the “hundreds of millions of dollars [the CEOs] were given represent a complete disconnect from reality,” but Republican representative Tom Davis killed his joy by saying that they “should not degenerate into a sanctimonious search for scapegoats.… Punishing individual corporate executives with public floggings like this may be a politically satisfying ritual — like an island tribe sacrificing a virgin to a grumbling volcano.” Indeed. Also, who knew Davis was so creative?
Credit C.E.O. Comp Under Fire, IV [Daily Brief/Portfolio]
company town
Another Sad Day for SchwarzmanFINANCE
• Where has all of Steve Schwarzman’s money gone? A report saying that his fund would earn less than half of what was predicted caused Blackstone’s stock price to tumble. [NYP]
• Former Countrywide Financial, Citigroup, and Merrill Lynch execs get ready to explain to Congress why they got huge paychecks as their shareholders lost billions. [DealBook/NYT]
• Financier Carl Icahn ups his stake in Motorola. [DealBook/NYT]
company town
Joe Dolce, Former ‘Star’ Editor, Gets a Taste of ‘Culture’MEDIA
• Former Star editor-in-chief Joe Dolce resurfaces, bringing Culture & Travel magazine back into the spotlight. [WWD]
• Former Seventeen editrix Atoosa Rubenstein resurfaces, bringing Alpha Kitty back into the spotlight. [HuffPo]
• And for those wondering how to keep tabs on colleagues who are masthead hopping, check out e-newsletter Gorkana, brought to your in-box by friendly PR people. [NYT]
company town
The Gray Lady Lets Jim Impoco Come Crawling BackMEDIA
• Fired Portfolio editor Jim Impoco makes his comeback at The New York Times Magazine, where he’ll be a consulting editor. [NYO]
• NBC puts its traditional glitzy advertising on the back burner. That’s really too bad for the girl who was hoping to be assigned to keep tabs on John Krasinski during the day of the presentations. [NYP]
• Nielsen CEO David Calhoun charts a new course for his media-measuring company. [Fortune]
white men with money
There’s No Crying in Hedge Funds (or, There Shouldn’t Be)Poor Mark Fishman. His Stamford-based hedge fund, Sailfish Capital Partners, exploded spectacularly last month, culminating in an ugly shouting match between Fishman and his founding partner, Sal Naro, and the loss of billions of dollars. (“It’s basically mayhem,” one insider told FinAlt at the time.) Bummer, yes. But did the former SAC golden child have to cry about it, in public? Quoth the Gray Lady:
On Monday Mr. Fishman, 47, sat in the paneled Princeton Club of New York, explaining what it was like to battle the markets—and lose.
“It feels like someone has died,” Mr. Fishman told The New York Times, his eyes welling up. “We’ve disappointed people, and there is no one more disappointed than me.”
It’s not that we don’t feel sad for Fishman, who has clearly been humbled by his losses. “It’s that sad dawning when you realize the market is so much bigger than you are,” he told the Times. Also, we appreciate the fact that after working at SAC for seven years he remains human enough to cry actual tears. But, dude: Crying in front of a reporter is okay when you have a limb blown off or, yes, lose a loved one, and it does wonders when you are running for president. But you don’t cry when you are rich and other rich people take some money away from you. Buck up! You still have your big old house in Westport, don’t you?
Tough Times for Big-Name Funds [Dealbook/NYT]
early and often
Now We’re All Talking About Money, and It’s AwkwardAfter Hillary Clinton announced late yesterday that in January she lent $5 million dollars to her own campaign, it got us thinking: If we donated money to her in the last couple of weeks, were we actually just paying her back? Clinton called the loan a wise “investment.” Now, we know that she’s not going to make, like, a profit on this investment (that would be especially awkward, now that highly placed officials in her campaign are going without pay) unless it’s in “political capital.” But the loan is estimated to be upwards of 10 percent of her personal wealth, which sets up this weird expectation that she is maybe going to get it back.
white men with money
On the Inside, Steve Schwarzman Is Still Just a Short Kid From Philly Blackstone CEO and co-founder Steve Schwarzman comes across almost like a real-live human being in James B. Stewart’s profile of him in this week’s New Yorker, which traces the titan’s childhood as the son of a dry-goods store owner in suburban Philadelphia (at 15, he is stymied by his father’s reluctance to expand said store into a national chain, “like Sears”) through the infamously lavish 60th-birthday party that helped make Schwarzman the poster child for greed and self-indulgence of the new gilded age. But despite the fact that he has a net worth of at least $10 billion, “I don’t feel like a wealthy person,” Schwarzman tells Stewart, cracking a window into his psyche. Contrary to his actions, he’s also not entirely obtuse: “Private equity is seen as a symbol of the people who are prospering from a world in flux. That’s a lightning-rod situation.”
company town
Have You Heard? There’s a New Economic Freak-out Happening!FINANCE
• William A. Ackman of Pershing Hedge Funds got everyone freaking out about bond insurers by issuing a report yesterday afternoon predicting that MBIA and the Ambac Financial Group might just lose $24 billion on mortgage investments. “Here comes Ackman at the 11th hour upsetting the apple cart,” Douglas M. Peta, chief market strategist at J.& W. Seligman & Company, told the Times. “I don’t think anybody has really thought it all through, but we all understand the implications of real trouble in the bond insurers could be far reaching.” [NYT] Related! MBIA announced a $3.5 billion write-down this morning. [CNN]
• Wharton is still the number-one place in the universe to pick up an MBA.
[FT]
• Following in the steps of other CEOs with giant mortgage-related losses, Merrill won’t give its top brass any bonuses. But they will give them stock options “to promote the continuity of the management team as they continue to navigate through challenging market conditions in 2008.” That’s one way to hang on to staff. [Reuters]
it just happened
Bernanke Cuts Interest Rate; Dow Drops, Goes Up Again
After a fraught holiday weekend in which the European and Asian stock markets dropped in response to Wall Street’s weakened state, and the nation grew near-hysterical with recession fears, the Fed finally stepped in this morning with an unprecedented eleventh-hour rate cut, to 3.5 percent. But was it too little too late? At first it appeared to be so: In the first half-hour of trading this morning, the Dow was down by 450 points. Now it’s hovering around 300, and analysts on CNN are encouraging a glass-half-full attitude. “This is not the biggest market drop ever, this is a steep drop and it’s coming after a couple weeks of steep drops,” one just said. “For the market to even close, to halt trading, we would have to see a drop of 1,350 points in the Dow Industrials.” Still, Asian and European markets remain volatile — and skeptical. “The dramatic reduction in the cost of money sends another worrying message to the markets,” London’s Daily Telegraph wrote this morning. “It says things are really looking very ropey indeed for the U.S. and by extension the global economy.”
it just happened
Layoffs at Citi? We’re hearing that layoffs at Citigroup began yesterday and are continuing today. No word yet on how many heads have rolled, but earlier reports suggested the numbers could reach 20,000, and our tipster says it’s a “bloodbath.” After the losses they reported earlier this week, this can’t have been a surprise to anyone at the bank. But here’s something that must have come as a shock: Citigroup was due to give out bonuses next week, and now we’re hearing those who were canned won’t get to partake. Representatives for Citibank said they’d call us back, but they haven’t yet, so … developing!
UPDATE: Ok, so it’s true: The first round of layoffs has begun. A Citigroup spokesman declined to comment specifically on the number of people laid off in New York or in any area, but during its earnings call this week the company indicated that in the fourth quarter, the bank would shed around 4200 employees worldwide. So far, those who’ve been sacked have been primarily in markets and banking. Regarding bonuses, Citi says that they’re scheduled to be doled out in the next week or so, but again wouldn’t comment specifically on if and how the newly unemployed would be affected. Some reports have said that company-wide, employees will receive stock instead of cash. Which, as someone but we can’t remember who pointed out, is kind of like Arby’s giving you a bunch of hamburgers instead of a paycheck.
Earlier: Vikram Pandit Gets a Write-down, Foreign Capital for His Birthday
white men with money
John Thain Keeps His Cool, Continues to Be Hot Our new boyfriend, Zeppelin-loving new Merrill Lynch CEO John Thain, seems to be keeping his cool remarkably well, despite his firm’s announcement yesterday that it was writing down $14.6 billion and lost nearly $10 billion, which caused its stock to drop 10 percent and fueled the growing perception that the economy is, or is about to be, in the shitter. But why shouldn’t he be calm? After all, “I didn’t cause this problem,” he told the Journal today. But he does plan to solve it: by expanding international operations, and adopting some of the hierarchical strategies of his former employer, Goldman Sachs. Thain’s hired Noel Donahue to run risk management and hopes to hire former Goldman co-head of sales and trading Tom Montag (no relation to Heidi). “The problem is not a zero, but it is for the most part behind us,” Thain told the Journal. Can Thain, with his Clark Kent good looks and cool-headed fixer attitude, transform into Superman, steer Merrill back on course, and save us all? We kind of think maybe. Oh, and there’s good news for media Chicken Littles, too: The Journal didn’t bring up the poop incident, which we take to mean that Rupert Murdoch hasn’t wrapped his soft hands around their editorial coverage just yet.
Merrill’s Risk Manager [WSJ]
Related: Setting The Story Straight On The Merrill Bonus Rage [Dealbreaker]
Related:Who Is NYSE CEO John Thain? [NYM]
white men with money
Can John Thain’s Hotness Save Merrill Lynch?Merrill Lynch lost $9.8 billion in the fourth quarter, the brokerage announced this morning. As with many of the other lenders reeling from mortgage mess, this is the firm’s biggest quarterly loss since it was founded, which, in Merrill’s case, was 94 years ago. In a scary bit of synchronicity, new Merrill Lynch CEO John Thain used the exact same words Citigroup CEO Vikram Pandit used the other day when his firm lost nearly $10 billion. The results are “clearly unacceptable,” they said. Yeah. Remember in It’s a Wonderful Life when Uncle Billy lost $8,000 and the Bailey Brothers Savings and Loan nearly went under? That was unacceptable. This is way worse. But on the bright side, Thain, who replaced recently deposed Stan O’Neal, has lately brought in some liquidity by selling a commercial-finance unit and almost $13 billion worth of capital investments overseas. “We’re very confident that we have the capital base now that we need to go forward in 2008,” he said in the conference call this morning. Well, he should be confident. After all, he is hotter than his predecessor, which, according to a recent study, bodes well for his success.
Live-Blogging The Merrill Earnings Conference Call [WSJ]
Merrill Posts Steep 4Q Loss [AP]
white men with money
John Paulson Acquires an Alan Greenspan
For sub-prime sufferers who blame Alan Greenspan for setting off the collapse with his low-interest-rate policy, today’s announcement that the former Federal Reserve chairman has joined up with John Paulson, the Queens native and hedge-fund manager who famously made billions of dollars betting against the mortgage market, must especially sting. Paulson & Company, which has assets of $28 billion, have hired Greenspan to be their own personal Nostradamus — they’re the only hedge fund he will advise on the direction of the economy and for whom he will assess, according to the Financial Times, “the potential for and severity of a US recession,” so that next time there’s a giant bust (credit cards! Auto loans!), they can roll around in piles of filthy lucre while the rest of us rubes wail and tear our garments in the streets. Although not if we’re canny. According to the Journal, Paulson, who recently gave a presentation titled “The Worst Is Yet to Come,” has been known to tell investors “it’s still not too late” to bet on economic troubles.
Trader Made Billions On Subprime [WSJ]
Greenspan Joins NY Hedge Fund [FT]
white men with money
Vikram Pandit Gets a Write-down, Foreign Capital for His BirthdayYesterday was new Citigroup honcho Vikram Pandit’s 51st birthday, and pretty much everyone forgot, since this morning he had to announce the largest quarterly loss in his bank’s history. To be sure, the $18.1 billion subprime-mortgage-related write-down is not as much as the $24 billion that was predicted over the weekend, but it was enough that it led to a fourth-quarter loss of $9.83 billion. But there was a silver lining: The bank says it has plans to raise upwards of $12.5 billion through a private securities sale, which includes $6.88 billion from Singapore. They also expect the Kuwait Investment Authority, Alwaleed bin Talal, and even former Citigroup CEO Sanford “Sandy” Weill to kick in with investments. That’s “a huge vote of confidence on [Weill’s] part,” one analyst told Reuters. “I’m surprised to see his name there.” We wonder if Pandit is surprised. Maybe today after work, he’ll go outside and Weill will be waiting for him in his red convertible. “Me?” Pandit will say. “Yeah, you,” Weill will say, and later that night they’ll share kisses over birthday cake while the Thompson Twins’ “If You Were Here” plays softly in the background.
Citigroup raising $14.5 billion [Reuters]
white men with money
Know Your Hedge-FundeseHedge-fund managers use a lot of lingo. The reason they do this is to trick you into thinking what they do is really complicated, and you are too dumb to understand it. Because after all, if everyone knew what “g-7 crosses” were, everyone would start trying to make piles and piles of money, and then there wouldn’t be as much left for hedge-fund managers! But n+1 was not fooled by their trickery. Recently, they sat down a hedge-fund manager and wrung out of him the meaning of some of his people’s most confounding words. After the jump, a starter guide to the Secret Language of Money.
white men with money
You Can Just Call Alan D. Schwartz ‘Mr. Smooth’Jimmy Cayne is officially out at Bear Stearns, the company announced last night, and Alan D. Schwartz is in as the new CEO. Yesterday’s Times referred to Schwartz as “a smooth, discreet investment banker,” Portfolio today called him a “smooth dealmaker,” and former Time Warner head Richard Parsons says he’s “a smooth operator.” But other than the fact that he is, apparently, silky soft and hairless, what do we really know about Alan D. Schwartz?
white men with money
Steve Schwarzman, Jamie Dimon, and Dick Fuld’s Elephant Dance ContinuesYesterday, we told you we’d read in the Post that Blackstone CEO Steve Schwarzman went to visit J.P. Morgan CEO Jamie Dimon and Lehman CEO Dick Fuld, so that he could forgive them in person for having pulled the plug on financing for his PHH deal. But it turns out that maybe that was a total lie? “A person familiar with the matter says no such meetings took place, and that Schwarzman was, in fact, out of town when the meetings were supposed to have taken place,” the WSJ DealBlog reported today. However! The Journal does back up the Post source’s statement that Schwarzman didn’t want to be in a “pissing contest” with the banks, although their source used a different, though still penile, metaphor. “This person did say that Schwarzman decided a sword fight with the banks is of little value, and that it is hard to fault the banks for the stand they took.” Emphasis ours!
Related: Steve Schwarzman Is Friends With Jamie Dimon and Dick Fuld Again
white men with money
Jimmy Cayne: The End of an EraFor Bear Stearns CEO Jimmy Cayne, his 74th year was a difficult one. In August, two of Bear’s hedge funds collapsed, heralding the subprime crisis and tipping off the worst losses in the firm’s history. Then there were the firings, the Wall Street Journal article that painted him as a slacker pothead (and also weird), plus the investor retaliations, the regulatory investigations, the whispers that, after 39 years of service, he might need to be canned. It’s enough to make anyone want to take refuge in golf and ganja. Which, the Journal and other media outlets are reporting, is what Cayne is doing. Citing “sources” who have been briefed on the situation, the papers are reporting that as early as today, Cayne will step down from his role as CEO at Bear Stearns and be replaced by Alan D. Schwartz. Cayne is “relieved,” one source told the Times. As with a great movie where the hero dies in the end, we knew this was coming, and yet still, we’re surprised. With his bridge addiction, his aversion to breakfast cereal, and his rumored affinity for the wacky tabacky, Cayne was a Wall Street original, an orchid in a sea of carnations, if you will. We’ll miss you, old chap.
Cayne to Step Down As Bear CEO [WSJ]
Bear’s Cayne Will Quit As Chief Executive [NYT]
Earlier: Intel’s coverage of Jimmy Cayne