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Bear Stearns circa 1985, “Thanks for the Memories”

Posted by Larry Doyle on February 8, 2012 6:31 PM |

I worked as a mortgage trader at Bear Stearns from 1990 until the end of 1996. Having started my career in the early ’80s and learned a lot about the business at First Boston, I will readily admit that my stint at Bear took my time on the sell side of Wall Street to an entirely new level.

While Bear obviously suffered a traumatic demise in 2008, I hope whomever views this marketing video clip of Bear Stearns circa 1985 will appreciate that Bear was a dynamic company filled with many great people and a truly unique culture.

I thank the friend who shared this clip with me. I share it here in the hope that former colleagues may appreciate the memories and others may get a feel for a Wall Street trading desk from this era.

I remember a lot from my days at the Bear. What do I most appreciate?

The practice of fully allocating expenses to each and every trading book instilled in me a level of disciplined expense management that I still appreciate today.

The Bear Stearns mentality and culture promoted a level of energy and motivation that was powerful.

Bear’s legendary CEO Alan “Ace” Greenberg would often say, “At Bear we much prefer people with a PSD than an MBA”. What is a PSD? An individual who was poor, smart, and had a strong desire to get ahead.

Although I will refrain from mentioning anybody by name in the video in this commentary, I do not mind singing the praises of the manager mentioned. John Sites was one of the primary reasons why I went to Bear Stearns. John possessed extraordinary personal and professional principles and values then and still does today.

Chuck Ramsey is also referenced in the clip. Chuck is a one of a kind true Wall Street legend! To know him is to love him.

What else is interesting about the clip?

Bear Stearns in the mid 1980s was effectively a New York based regional dealer trying to grow its franchise and compete with the major Wall Street players.

Notice the FHLMC 8 3/4 and 9% coupon mortgage securities trading at the deep discount of around 80 cents on the dollar. That price for those coupons is a reflection that prevailing mortgage rates at that point in time were somewhere around 13-13.5%.

A daily trading volume of $400 million may have been a respectable number back then but within a decade we were trading ten times that volume as the housing market began to grow exponentially with the decline in rates in the late ’80s and into the ’90s.

To all my friends from my days at Bear (there are too many to mention) and especially KF and MZ, “Thanks for the memories!!” I probably should also thank the salespeople with whom I did all of that relo business. That was spectacular!!

Please leave a comment and let’s have some fun recollecting.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.

  • Bill Berliner

    I think this was filmed around 1984-85, right around the time I started at the firm. John Sites had funky glasses that he didn’t have when I worked for him. And Chuck Ramsey still had the nuclear comb-over. And Grant Couch with hair…

    I also found it instructive that Chuck profusely thanked the dealer counterparty that brought him the trade and then used the conversation in a promo designed to cut dealers out of the business. Bare-knuckles capitalism…

    Finally, I think that Bear’s demise had a lot to do with the fact that the firm got away from a lot of Ace Greenberg’s principles, especially of risk management. No way that the firm should have sunk under the weight of assets that they could have liquidated. BB

  • coe

    Pretty quaint and nostalgic – PC9’s? PC8 3/4’s @79 24/32 – 80…pretty high interest rates, eh? bid/offer spreads that someone could drive a truck through…it is ironic that John makes the personal appeal in the video to cut out the regionals – pop quiz – what was the payment delay on PC’s back then – 54 or 75 days? When did that changeover take place? Inquiring minds want to know… Oh, last question – is there a savings and loan left in St. Louis in today’s consolidated world that would do a $70MM collateral trade – I don’t think so – my guess it might have been Roosevelt Savings in that era…another sign that the apocalypse in banking was destined to happen? BTW, Hard to find anyone over 30/35 in the video…As Bob Dylan sang, “I was so much older then, I’m younger than that now” great clip, LD!

  • Pat J

    I started at the firm in 1985 and the leadership at Bear stressed that everything was important and everyone was important. The clip reminded me that I originated a 1 year Fhlmc arm 12 % 1st year rate with a 5 % life cap in 1983. Clearly ,they were different times but I treasure the friends made over 22 + years and will always be grateful to Bear.

    • Paul F

      As long as we’re dating ourselves by reminiscing about higher rates, I have clear and not-so-fond memories of a 16 3/8 2 year note which paired perfectly with the 16 3/4 mortgage on my first house. I’m also surprised no one commented on the smoking on the desk or the oh-so-young Jonathan Ilany.
      For those who are curious, this video came Bob Soifer who amazingly was willing to post this to youtube and let people see him trolling for customers like a late night huckster.

  • Benny Salerno

    1985 wow! think that was the year I refinanced from a 14 3/4 mortgage to a 9% – now looking at our screens and 3% are more then par. Oh the good old days….

  • Matt

    I was with Bear for a short time in 1980 at 55 Water Street s a retail salesman.

    These were the partnership days.

    Two things I will always remember:

    Ace Greenberg coming around to everyone on a regular basis to say “Hello, How are things going?”

    George Sarner, one of the partners I reported to telling me on my first day that while the firm appreciated smart and aggressive people, just remember that since he was a partner of the firm “I was playing on his dime”.

    How different was that mindset from the public company which played with OPM (Other People’s Money).

  • Warren Wales aka WWW

    Great video, great memories, great people, to bad how it all ended. I hear there’s a black market BS basketball video out there featuring the MTG trading desk vs the POPs desk. Now there is a classic !!! Thanks John Sites for giving me those 15min, the rest is history…

  • Grant

    I remember the day that video was shot…long time ago…

    What a flash back; memories and many stories – all with hair.

    Thanks for sharing it!!

  • Wall St Gladiator

    I was on the 49th floor with the futures trading group. Ace personally welcomed me to the firm on my first day and we spoke for 10 -15 minutes. Greatest place to work and it really bothers me how it all ended.

    So, on a related topic :), does anyone recall the massive crowds at the south street seaport on Thursday and Friday afternoons back then? I have since moved to SoCal and took my family on a tour of the places I worked in Manhattan and we drove by the Seaport on a Friday afternoon 5-6pm and there was no one there.

    I’m guessing this stopped around the beginning of the 90s?

  • Jr

    I was hired by Tommy O’Neill in 1987 and was blessed to learn at the feet of the late, great Herman Sandler. What a dynamic place I was so fortunate to have fallen into. My first day I recall sitting next to Chuck and him asking me if I knew what a WAC was. Or a WAM. I knew neither. He shouted to MPG “Hey Jugs….teach this rook a few things”. Of course you’d get fired today for even thinking the things that Chuck said every minute of the day. It was truly the wild west and I was grateful as a young man to have that seat. I met so many great people there.
    I stayed for 14 years. Ultimately what lead to the fall of Bear was that management really believed their own BS. As an outsider by then it was shocking that they employed so much leverage.
    However the memories remain and I knew some really fine people there. Among them were Ralph, Kevin F. Mike Z (God rest his soul), LD, DV. Mulv, Mike N., Bobby….and so many others.
    Thanks for the memories






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