Well, it seems like the luck of the Irish didn’t extend to the gang at Bear Stearns. If you haven’t been following this financial goat rope, let’s recap.
For some time now the folks at Bear Stearns, previously touted as the country’s fifth largest investment bank, have been assuring the financial industry, shareholders and the general public that they’re just fine thank you. I say this because up until the end of last week they’ve been saying things like … “uh, we’re just fine thank you.”
All of a sudden, at the end of this past week, I’ll be damn if somebody over there didn’t discover that, rather than being fine, they actually were suffering from an enormous liquidity crisis. Apparently Fenster over in accounting forgot to carry the one and add the decimal point.
Is there anything worse than waking up on Friday and discovering you’re suffering a liquidity crisis? That’s why I keep a separate beer fridge at the house. Yes, it adds to my carbon footprint, but I haven’t suffered a liquidity crisis in a couple years. So that’s nice.
Anyway, can you imagine the surprise over at the Bear Stearns executive suite when they realized all wasn’t well in fat city? Luckily, we’ve got actual transcripts for what went down. Its best not to ask how we obtained these recordings, just be thankful they didn’t fall into the wrong hands.
Date: Friday 14th March, 2008
Location: The office suite of the Grand Whazoo of Bear Stearns Investment Bank
Senior Executive Wiggins: “Afternoon Ms Blodgett, is R.J. in?”
Ms Blodgett (executive assistant to the Senior Cheese): “Go on in, he’s expecting you.”
Wiggins: “R.J., missed you at this morning’s executive crap session…the presentation on our anticipated bonuses was absolutely first rate. I’m still tingling.”
R.J.: “Cork it Stumpy, we’ve got something more important than our bonus scheme to think about…you seen this report from Frohman in accounts?”
Wiggins: “Frohman? Never heard of him…”
R.J.: “Came over in the Baumgarten acquisition, part of the Subprime Accounts Department…”
Wiggins: “Right…good man, lots of profit in that department…doing excellent work, really creative bundling of whatever it is they do…”
R.J.: “Where the hell you been? They’ve tanked…billions written down, never could understand what they were up to…”
Wiggins: “Good point R.J….Frohman’s a little bastard, he and his entire pack of Subprime hooligans…never trusted ‘em. Let’s sack the whole lot and distribute their bonuses to Jenkins in Risk and Compliance…”
R.J.: “Never mind that…Frohman’s just generated a report that says we don’t have any money… seems he ran the numbers and we’re out of cash.”
Wiggins: “When you say out of cash… does that include the bonus pool?”
R.J.: “Listen, this is bad… I just had a conference call yesterday telling investors how well we’re doing, now we couldn’t afford one of Spitzer’s call girls…I’m gonna’ look like an idiot.”
Wiggins: “Calm down R.J., folks will understand…running one of these banks is pretty confusing, there’s lots of big numbers and fancy investing schemes and complicated words…I’m surprised we didn’t go under sooner.”
Ms Blodgett: “Chief, JP Morgan Chase is on line 2…something about a fire sale?”
R.J.: “Damn it…how’d those vultures get wind of this…put ‘em on hold.”
Wiggins: “Don’t we have an emergency fund somewhere around here?”
R.J.: “The crisis fund? It’s a bottle of Jack and 500 bucks in Scores dollars…probably won’t get us through this situation…not if Frohman’s right.”
Wiggins: “Jeepers R.J., this is bad…any idea how it happened?”
R.J.: “Greed…avarice…lack of due diligence…incompetence…crazed risk taking in pursuit of profits…”
R.J.: “Naaahh, just kidding. Obviously it’s not our fault. Who knows how these things happen…a billion here, a billion there, next thing you know, ol’ man Potter’s offering pennies on the dollar.”
Wiggins: “Whaddaya gonna’ tell JP Morgan?”
R.J.: “Well, first thing’s first…we gotta’ keep our priorities straight and focus on what’s important.”
Wiggins: “Cash bonuses, use of their corporate jets and inclusion in the Morgan Chase health plan?”
R.J.: “Exactly Wiggins… I think we can show a little selflessness and forego the stock options.”
Wiggins: “Well done R.J., see you in the Hamptons.”
And thus, another investment bank bites the dust. If you happened to be a shareholder in this institution, turn your head and cough. You may experience a little discomfort but I’m sure the financial industry will be gentle. It may help if you bend over.
And now, on to other news. Lemme’ see, where should we start?
Okay, Eliot Spitzer is now the ex-governor of New York. David Patterson, previously the lieutenant governor of New York, was sworn in as governor at the beginning of the week. One day later he and his wife announced that they both had been involved in extramarital affairs. Not exactly what we might have been expecting in terms of initial announcements from the new Gov’ but certainly more interesting than a state fiscal review.
However, not as interesting as the announcement this week from former New Jersey Governor Jim McGreevey. You might recall that McGreevey resigned his post some time ago (the PWB staff is really crappy with fact checking actual dates) after announcing he is a gay American and had an affair with some dude in his office. He’s now in the middle of one of America’s nastiest divorces, which of course is really, really healthy for their 6-year-old daughter.
Anyway, as if the kid didn’t have enough to contend with, apparently during the recent course of the divorce, McGreevey’s former chauffeur, another dude, announced that he had engaged in three way McLovin’ with the governor and his wife. The soon to be ex-Mrs. denies the stories, but Jimbo has announced that the driver’s tales of double parking are true.
All of this obviously begs the question — if you’re a senior elected official with family and pressing work concerns, how do you possibly have time to engage in all these shenanigans?
I don’t know about you, but between my family obligations and work, I’ve got just enough time to get my teeth brushed and take out the trash.
How do you set aside enough time to go sneakin’ down the alley looking for a little something extra?
As with many such issues, I’m not interested in passing moral judgment…I’m just fascinated with the logistics of it all. Here’s a thought, if you’re an elected official with a itch to engage in some hi-jinx, redirect all that pent up energy into actually doing your job. The advice is free and it’ll keep you off the front pages.
Talking about the front pages… perhaps you’ve noticed over the past few days all the brouhaha about Senator Obama’s pastor at his church in Chicago. The now retired, but still influential Pastor Jeremiah Wright has made a career of peppering his sermons with some very inflammatory and controversial statements.
Some of these sermons are made available by the Trinity Church on DVD, just in case you’re sitting at home with an urge to listen to some ranting, disguised as sermonizing, about why America sucks.
The controversy for Senator Obama is that he’s been a member of the church for over 20 years. He was married by Pastor Wright, his kids were baptized by him, he has referred to the pastor as his mentor and has said in the past that he didn’t make any big political moves without consulting first with Pastor Wright.
Sounds like they’ve been pretty close, and in fact the Senator did say in a speech Tuesday that the pastor is like a member of his family.At the same time, in an effort to suspend disbelief, Senator Obama is claiming ignorance over some of the pastor’s past incendiary statements.
Now, I can understand sleeping through the occasional sermon. I myself have often woken up just as the hymn starts, with absolutely no recollection about what was said during the past twenty minutes.
But then again, I’ve never attended the same church for 20 years and have never considered a pastor, reverend or minister as my mentor. And, to be fair, none of my past religious leadership figures have stated that AIDS was invented by the U.S. Government, that the U.S. was to blame for 9/11, that Israel is a dirty word or that America essentially deserves all the ills visited upon it because it is a racist, arrogant country.
The most inflammatory statement I’ve ever heard while sitting in church is that too many folks have signed up to bring Jell-O to the Memorial Day picnic and we could use some volunteers to bring hot covered dishes.
So, the Obama campaign now has its knickers in a knot because people, meaning the newly aggressive media or people who haven’t drunk the Change elixir, have dared to point out that the senator’s association with the fiery pastor might need some context.
It seems unlikely at best that Senator Obama was unaware of Pastor Wright’s positions on various issues and his past statements that many in America might find offensive, questionable or hateful. Yet that is the tact taken by the senator and his campaign.
You want change we can believe in?
Maybe Senator Obama and his campaign ought to change the way they’re explaining the relationship with the pastor.
The issue here isn’t race, except to the degree that the Obama campaign tweeks it that way. The issue here is the friendship and mentoring relationship between the senator and Pastor Wright, given the pastor’s anti-American attitudes and rants.
The senator can’t set himself up as the great unifier and Changer of all things divisive, and then act surprised or disappointed when people ask how that image coexists with his close 20 plus year relationship with the divisive Pastor Wright. Any candidate, regardless of race, gender or political leanings, would undergo the same treatment if they were in a similar situation.
Just my opinion. As always, we look forward to your thoughts and comments. Send your emails to email@example.com
Till next week, stay safe.
Mike Baker served for more than 15 years as a covert field operations officer for the Central Intelligence Agency, specializing in counterterrorism, counternarcotics and counterinsurgency operations around the globe. Since leaving government service, he has been a principal in building and running several companies in the private intelligence, security and risk management sector, including most recently Prescience LLC, a global intelligence and strategy firm. He appears frequently in the media as an expert on such issues. Baker is also a partner in Classified Trash, a film and television production company. Baker serves as a script consultant and technical adviser within the entertainment industry, lending his expertise to such programs as the BBC's popular spy series "Spooks" as well as major motion pictures. In addition, Baker is a writer for a BBC drama to begin production in July 2007.