Monday, March 17, 2008

Bear Stearns employee interview

Full disclosure: I got scored this interview by sleeping with the interviewee. Is this unethical?

Background: JS, 35 year old male Bear Stearns employee trading equity derivatives speaks to me.

Me: How long have you been working at BS?
JS: 8 months.
Me: How do you feel about the current situation?
JS: I feel that management let me down and the Fed also.
Me: How so?
JS: I think it was important for the Fed to open the discount window to investment banks, all at the same time. If they'd done that a week ago, it might have prevented Bear Stearns from collapsing. [As for management], I think it took management too long to recognize they had a problem.
Me: Can you elaborate?
JS: Even I noticed the problems. I noticed our funding costs going up. I noticed some unusual trading activity on the 30 and 35 strike puts when the stock was trading at $80.
Me: So why didn't you buy some of those puts so we'd have a lot of money for our retirement and our kids' college education funds if you suspected something going down?
JS: As employees, we're not allowed to buy or sell the stock.
Me: What do you think about the JPM deal?
JS: It seems like they arrived at a very discounted number and even some of what JPM said suggested that they think they bought it for cents on the dollar. I believe they expect to harvest much of that value.
Me: Is the culture of firm ownership true?
JS: I don't know if it's forced upon people with a 5 year vesting period or whether it's a natural respect for the company, but there is a very high percentage of employee ownership. There is some element of belief that to own the stock is to be loyal to the company. But I also heard that your shares don't vest for 5 years, if that's true, I am extremely unimpressed with the Bear Stearns stock plan. (Average is 1-3 years vesting period)
Me: What was it like going in to work Monday? What did you expect?
JS: It was actually business as usual day.
Me: C'mon...really...It didn't feel as pivotal or emotional as going in to work like after 9/11? Your company went bankrupt overnight...
JS: No.
Me: How much employee wealth do you think is wiped out?
JS: I calculated $250K per employee, but the billion dollar loss from one guy is throwing this statistic off.
Me: Do you feel bad for any of your co-workers?
JS: Yeah. Especially the ones with a lot of stock.

Me: Were there any disgruntled or emotional employees? Outbursts? Drama? Tears?
JS: There were a number of people in a delicate emotional state. No tears streaming down their faces, but they were close to crying.
Me: Are you worried about losing your job?
JS: Not really.
Me: Why not? Are you more worried about me spending money?
JS: Yeah.
JS actually just conked out and started snoring so this interview is over.

10 comments:

Anonymous said...

I loved your interview with the BS employee...er...lover. I realize that you don't want any male readers but I couldn't help myself. Looking forward to you and your future posts....

frank said...

The great Depression musical, Gershwin's GIRL CRAZY had some lines set to wonderful music:

My stocks and bonds
May fall downstairs...
Who cares? Who cares?

This intimate interview is priceless.

Anonymous said...

this is by far the best recession post/story i've read so far. keep it up!

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