The last three days Bear Stearns existed as a firm were filled with frantic phone calls, tense meetings and high drama.
Reporter Kate Kelly’s new book, Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street is an attempt to chronicle the last days of the firm. Kelly’s reporting in the wake of Bear’s fall was probably the best work done on the debacle. We haven’t seen the actual book yet, but the WSJ excerpt has strong, inside detail (We’ll likely have the book tomorrow, so more then).
Outlines the whole, sordid affair.
Kelly, the Wall Street Journal reporter that Jimmy Cayne insulted for the benefit of Bill Cohan’s book about the fall of the firm, gets good detail into the crazed final hours.
At one point, Jamie Dimon’s chief lieutenant, Steve Black was in Anguilla and left his cell phone in his hotel room when he went to dinner. Dimon had to try and track him down at a restaurant to discuss the possibility of rescuing Bear.
Later, after JP Morgan had extended a credit line to the dying firm, according to an excerpt in this weekend’s WSJ, Bears troops that they’d been saved. They were wrong:
A few minutes later, the New York Stock Exchange opened for business, and In the 17 minutes between the issuance of the first release and the opening of U.S. stock markets for official trading, Bear shares launched an impressive rally, rising more than 9%. Mortgage traders on the seventh floor were thrilled. “We’re alive!” somebody yelled. The cost of purchasing insurance protection against a default by Bear on its debts was dropping to its lowest point in days, and there was gleeful talk about how the so-called “shorts” — traders hoping to make money on Bear shares’ decline — would get “squeezed,” or lose their shirts.
Mr. Black was packing his things in Anguilla when he caught word of the stock activity. J.P. Morgan had located a corporate jet in Miami, and it was on its way to whisk the executive and his family back to New York, where he could advise on whether to purchase Bear — one of the options now on the table. He shook his head. “People don’t understand what just happened here,” he told his wife. “I guarantee by the time we land, that stock is going to be in half.”