We are obviously upset with our 2007 results,
particularly in light of the fact that weakness:
...in fixed income more than offset strong and, in some areas, record-setting performance in other businesses,” James E. Cayne, Bear Stearn’s chairman and chief executive...in a statement.de la Merced/NYTimes 20.Dec.07
The fate of Mr. Cayne, its longtime leader, has been the subject of much speculation on Wall Street since this summer. As two internal hedge funds that had bet on home mortgages began to crumble, questions about Mr. Cayne’s leadership arose. Reports that he had gone golfing during the worst parts of that crisis did not help.
The investment bank lost so much capital that Bear Stearns formed a partnership this fall with China’s Citic Securities, in which the two firms swapped shares. Though not as drastic as other firms’ measures to shore up capital — Morgan Stanley on Wednesday announced the sale of a $5 billion stake to China’s sovereign wealth fund, and both Citigroup and UBS made similar deals with Middle Eastern and Asian governments — it was a reflection of how weak Bear Stearns had become.
The firm has also suffered much internal turmoil.
