The Final Word on Bear Stearns

Lots of folks have been weighing in on the demise of the Bear, few of which of qualified to speak, and had no clue what the place was really like.

The Manhattan Athletic Club, on the ground floor of 277 Park Avenue, was popular with Bear employees until they build their own gym at 383 Madison. Over the years the gym was populated by employees of other shops, including DLJ and later JP Morgan, but the Bear guys always stood out from the stuffed shirts. The New York Times did a nice job summing up the shop:

Back in the days of ticker tape, when Wall Street firms like Morgan Stanley hired young men with pedigrees from colleges like Princeton and clubs like Piping Rock, Bear Stearns was the kind of place where hardscrabble Brooklynites could get a job.

Bear’s former chairman, Alan Greenberg, known as Ace, even had a name for these hires: P.S.D.’s, as in Poor, Smart, with a deep Desire to become rich. Not only did Bear fulfill the dreams of the P.S.D.’s, it was also a proving ground for many of the titans who created today’s Wall Street....“It was a place where a young guy could get ahead on merit,” says Jerome Kohlberg Jr., who worked at Bear for 21 years before leaving to found K.K.R. in 1976 with Henry R. Kravis and George R. Roberts. “They didn’t care where you came from if you showed you were willing to work. There were Jews, gentiles, Italians, Irish. It was a mixed bag.”

The Bear guys dominated 45th and Park, Bobby Van’s steakhouse at 230 Park was like their cafeteria, and I would short that restaurant if it was publicly traded. Just another example of businesses that will be hurting from the demise of Bear.

I hate to see Ace Greenberg’s shop go down like this, but in the end nobody took his advice. Perhaps they were afraid of Jimmy Cayne after he cut Warren Spector off at the knees, but the blame and pain should be shared because in the end nobody took Ace’s sage advice:

“We want people at Bear Stearns to cry wolf,” he advised. “Forget the chain of command! That is not the way Bear Stearns was built. If you think somebody is doing something off the wall or his/her decision-making stinks, go around the person, and that includes me.”

Nobody went around Jimmy, and now the firm is gone.

What ‘the Bear’ Meant for the Street
New York Times
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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

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