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Tuesday, March 18, 2008

The problem with Corporate America
Posted by Jill | 6:01 AM
...can be encapsulated right here:

JPMorgan Chase is obviously acquiring a lot in its $236 million purchase of Bear Stearns. For pennies on the dollar, the banking giant is buying extensive prime brokerage and clearing operations, as well as a $1.2 billion office building.

But there’s some truth to the old aphorism that a financial firm’s assets go out the door every night. Citing people involved in the deal talks, The New York Times said Monday that up to a third of that work force may not come back, involuntarily.

Still, JPMorgan is trying to retain some of that human capital all the same. Up in the air, however, is whether the bank will retain one of Bear Stearns’ most valuable assets of all: its chief executive, Alan D. Schwartz.

It’s notable that in announcing the deal Sunday evening, JPMorgan made no mention of what would happen to Mr. Schwartz or other senior executives if the deal goes through. Bear Stearns has been similarly mum.

JPMorgan has floated a couple of ideas about how to retain Mr. Schwartz, according to people involved in the talks. One idea is to make him a vice chairman and, unofficially, a deal maker at large who can parachute into different situations. Such a position would similar to the post held by James B. Lee Jr., the JPMorgan banker known as Wall Street’s money man.


Yes, folks, the CEO who ran the company into the ground is "its most valuable asset." And all those poor schmucks -- not the big-money guys who packaged worthless mortgages into "investment" vehicles, but the low-end guys -- the trainees and the secretaries and the dishwashers in the corporate dining rooms? I guess they can go Cheney themselves.

(h/t)

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3 Comments:
Anonymous Anonymous said...
It's all sorts of FUBAR.
3/18/08, 7:46 AM  
Anonymous Anonymous said...
Schwartz was appointed CEO of Bear Stearns in January. The real culprit is former CEO Jimmy Cayne who decided to go play in a Bridge tournament while his company was going down the tubes

Chairman Jimmy Cayne was playing cards in a tournament late last week while his company's future appeared to be at risk, according a published report.

As the bank hammered out an emergency funding deal on Thursday with the Federal Reserve and JPMorgan Chase (JPM.N: Quote, Profile, Research), which resulted in Bear's shares falling by as much as half, Cayne was playing in the North American Bridge Championship in Detroit, The Wall Street Journal reported on its Web site on Friday.

Of course, Cayne has still managed to walk away from this debacle with $13.4 million in his pocket. Only in the Republican version of the "free market" can a guy fuck up so royally and still walk away rich.
3/18/08, 9:59 AM  
Anonymous Anonymous said...
This post is an interesting contrast to the one on Barak Obama's speech -- which is a great speech by the way.

In both cases ideological critics (Republicans and Clintonites in the case of Obama and anti-capitalists in the case of Schwarz) are taking information with limited and misleading context to score points, hoping that people will not fully inform themselves to the complexities of the topic.

The goal in Obama's case is to paint him as unpatriotic and unappreciative of a large block of his fellow citizens and the goal in the Bear Stearns case is to paint bankers as greedy SOBs who rob real Americans with the help of the government.

While both stereotypes contain a kernal of truth -- they would not become stereotypes that stick if they did not -- they also present an incomplete and inaccurate overall picture.

I find it interesting that the blogger here falls for one hook line and sinker and then approaches the second so rationally. Of course, that is human nature at both its best and its worst all wrapped up in one being.
3/18/08, 1:52 PM  
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