Down with the Bear

If you have a long commuting trip, are stuck in a traffic jam, or don't know what to do to spend the weekend, I suggest you to pick up the latest Vanity Fair. No, not the Nabokovesque Miley Cyrus' (a.k.a Hannah Montana) photo shoot --that's in the past edition--, but this 8 pages long in the website version, or 16 full pages if you print it, journalist's investigation on the last days of the once mighty Bear Stearns.

It tells you how those big names in the financial world work, how influential the media is (CNBC, to be specific), and how the nervous Fed acted. If you don't know the different perceived style between Lynch, Sachs, Stanley, and Stearns in making money, like I do; or how important to speak up to the right news anchor is; or how close the Fed, Treasury, and Wallstreet are; then, perhaps, it's the right reading.

Here is what happened in that fateful night of the Bear.

That day was Dimon’s 52nd birthday, and he was celebrating with a quiet family dinner at Avra, a Greek restaurant on East 48th Street. He was irked when his private cell phone rang; it was to be used only in emergencies. On the line was Parr, who put Schwartz on as Dimon stepped outside onto the sidewalk. Schwartz quickly explained the depth of Bear’s plight and said, “We really need help.” Still irked, Dimon said, “How much?”

“As much as 30 billion,” Schwartz said.
“Alan, I can’t do that,” Dimon said. “It’s too much.”
“Well, could you guys buy us overnight?”
“I can’t—that’s impossible,” Dimon replied. “There’s no time to do the homework. We don’t know the issues. I’ve got a board.”

The people he should call, Dimon said, were at the Fed and the Treasury—the only place Bear could get $30 billion overnight. Still, Dimon promised to see what he could do to help. He hung up and dialed Tim Geithner at the New York Fed downtown. Twenty-first-century Wall Street is a highly interconnected world, with just about everyone lending billions of dollars to everyone else, and Geithner worried that Bear’s collapse might trigger a domino effect, taking down scores of other firms around the world; he urged Dimon in the strongest terms to think about somehow helping Bear. “Tim, look, we can’t do it alone,” Dimon said. “Just do something to get them to the weekend. Then you’ll have some time.”

In case you don't know the names: Jamie Dimon is the JP Morgan's CEO, Gary Parr a top investment banker of the Lazard Freres, Alan Schwartz the Bear Stearns' CEO, Tim Geithner the New York Fed's President.

A caveat, it's a journalist report, so don't expect for a heavy bibliography. Whether the account is true, let's wait for the responses from the parties mentioned.