Sense on Cents

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

Isn’t it time to subscribe to all my work via e-mail, RSS feed, on Twitter or Facebook?

Do your friends, family, and colleagues a favor and get them to do the same. Thanks!!

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.

This entry was posted on Wednesday, February 8th, 2012 at 6:31 PM and is filed under Bear Stearns, General. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.