Wall $treet Folly

Was Bear Stearns' CEO's party invitation lost in the mail?

Or was Alan Schwartz just plain dissed at a luncheon hosted by Ben Bernanke and attended by most every other Wall Street BSD?  Or maybe he was invited and was just too busy trying to put out fires on the home front.  In any case, Bernanke hosted one hellofa gathering (click on picture to enlarge)....

Federal Reserve Chairman Ben S. Bernanke lunched on March 11 with a Who's Who of Wall Street leaders, including JPMorgan Chase & Co.'s Jamie Dimon, three days before the central bank rescued Bear Stearns Cos. from bankruptcy.

Other guests included Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein, Lehman Brothers Holdings Inc. CEO Richard Fuld, Morgan Stanley President James Gorman, Citigroup Inc.'s Robert Rubin, Blackstone Group CEO Stephen Schwarzman and Merrill Lynch & Co. CEO John Thain. Alan Schwartz, the CEO of Bear Stearns, was not listed among the attendees.

Bear Stearns' Alan Schwartz probably will land a senior JP Morgan role

According to the Daily Telegraph, Bear Stearns CEO Alan Schwartz will probably be offered a job with soon-to-be-new-parent JP Morgan, although any announcement won't probably come until after the fate of more of the company's 14,000 staff becomes clearer...

Mr Schwartz, who only took on the top job at Bear in January after James "Jimmy" Cayne stepped down to become non-executive chairman, will become one of the bank's top "rainmakers", working with key clients on mergers and acquisitions and other high-profile deals.

However, it is understood that Mr Schwartz does not want to formally accept a role until the majority of the bank's 14,000 staff know whether or not they will be keeping their posts.

Jamie Dimon to his vanquished Bear Stearns captured troops: “I feel terrible sometimes when people think we took advantage. I don’t think we could possibly know what you all are feeling, but I hope that you give JPMorgan a chance.”

JP Morgan chief Jamie Dimon, who arguably made the deal of the century by picking off failing Bear Stearns for a paltry two bucks a share, paid over 400 of his vanquished (and understandably very hostile) captured troops a visit yesterday evening, asking for a chance.  Dimon is looking to retain the best of Bear's staffers, but it was also crystal clear that many of the 14,000 employees would lose their jobs.  The possibly good news: those who stay could receive 25% of their Bear Stearns stock in shares of JPM as well as a one time cash payment.   Here are some quotes from the NY Times account of the meeting:

“I don’t think Bear did anything to deserve this,” Mr. Dimon said. “Our hearts go out to you.”

“No one on Wall Street could have anticipated this,” he continued. “I feel terrible sometimes when people think we took advantage. I don’t think we could possibly know what you all are feeling, but I hope that you give JPMorgan a chance.”

Over the next 45 minutes, Mr. Dimon made it clear that he hoped to retain the best employees at Bear but also made it plain that many of Bear’s 14,000 employees will lose their jobs as a result of the deal, struck at the urging of the Federal Reserve and the Treasury Department. JPMorgan executives plan to cull one Bear employee after another, while keeping the best performers, as they move to integrate the two firms.

It's official: Jimmy Cayne is out as CEO, Alan Schwartz is in

As expected, Cayne remains Chairman.  Now he'll have more time to play golf, bridge and enjoy his bong....

"Jimmy has much to be proud of -- under his leadership Bear Stearns has grown substantially over the past 15 years, with revenues increasing to $7 billion from $2 billion and the number of our employees more than doubling to 14,000," said Vincent Tese, Bear Stearns lead independent director. "This was his decision, and we are very pleased that he has agreed to stay actively involved in the business as chairman of the board."

"The company's talent pool is particularly deep and the board is fortunate to have someone of Alan's caliber and experience ready to step in to lead the company," Tese added. "Alan has spent more than 30 years at Bear Stearns; he deeply understands our business and culture, and he is a strong leader and manager who is admired and respected throughout the organization."

Here's the full press release: