Bear Stearns CEO Blames Media For Company's Collapse

Muckraked!:

From Muckraked!

When it comes to assigning blame for his firm's collapse, Alan Schwartz, the president and CEO of Bear Stearns, borrows a page from Countrywide CEO Angelo Mozilo:

Blame the media.

While Bear Stearns was "adequately capitalized and had a substantial liquidity cushion," the firm imploded due to the weak credit market and "the unprecedented speed at which rumors and speculation travel and echo through the modern financial media environment, the rumors and speculation became a self-fulfilling prophecy," writes Schwarz in his prepared testimony for today's Congressional hearing.

Read the whole story: Muckraked!

Comments

[gcallaghan]

When all else fails, shoot the messenger

[funkalicious]

Smug accusations and million dollar payouts to idiots like Alan Schwartz.
The media if anything has dropped the ball on the Fed bailout story and the Derivative nightmare ticking time bomb.

Four men in a room Paulson, Schwartz, Dimon and Bernake, handed the American people a tax increase of 30 Billion dollars to support their complete and utter incompetence.

Bernake accepted a bag of crap as collateral, and has handed that bag of crap to the american tax payer.

The movement of money made all of the CEO's rich beyond the average worker in America's wildest dreams.

The media seems fixated on bailout not the theft.

[smokeystover39]

And just HOW did this genius find out the collapse of BS was all due to the media??? Divining chicken innards? Wise up pal, CHECK THE BOOKS!!!!!!!!!!

[ChicagoBob]

!

The concept of personal responsibility is pretty much dead in this country.

This is one of the primary reasons we are in the present mess.

Wise, well reasoned choices are not so important when you can easily blame someone else for your failures. When you are allowed to escape the logical consequences of your poor behavior.

Thus poor choices, poor results. Unbridled greed. War. Economic disaster. Huge dept. Wasted lives.

I do not hate America but I do hate what the neocons have made of my once great country.

!

[nomadicexpat]

these comments demonstrate an amazingly weak understanding of how the banking system works, by a bunch of arm chair quarterbacks

first off, Schwartz didnt run Bear into the ground. He was put in the CEO job a few weeks before the collapse. He was a banker, not a mortgage guy. he came from a completely different part of the bank from the risk takers who decided to take on the mortgage decisions. This is like blaming the secretary of agriculture when our treaties with Russia go wrong

secondly, NO BANK can withstand a run. they may have been well capitalized, but if everyone asks for their money back at the same time they will have to go out of business. banks are a leveraged institution by definition. and rely on borrowing to conduct business. this was the core of the problem. watch it's a wonderful life, maybe you'll understand what happened. same thing, just bigger with more repercussions

[FreedomCorpse]

Alan sounds like a bush a few years ago blaming the media and whomever for the Iraq debacle. A subprime CEO paid tons of money for complete and utter failure.

[Mutineer]

Mr. Schwartz, if you were "adequately capitalized" this would never have happened. When your clients want their money back you have to be able to produce it.

[gakabani]

It seems that he has no responsibility!

What a moron!

[LivingStardust]

Denial and deflection are his only skills or else this jackass wouldn't have run the company into the rocks. He's only fooling himself.

[ymax]

What a LOSER.
got millions in pay and blame the media?
Get a life!

[hoopesaz]

Certainly more complicated than that, but there is an element to truth to it. A rumor circulated by the media that the bank had liquidity problems (which it did not) caused a run on the banks cash reserves, causing a liquidity problem.

I don't know that it was the media's fault, but I understand there is an investigation into the rumors. I think Bear's has a case. It's essentially the effect of libel on a corporation.

[Neil Grossman - Huffpost Blogger]

The genesis of Bear's problems probably started last summer when several funds run by the firm imploded; and, by the way, received no help from Bear. That certainly could not have endeared them to clients. (Actually this should not have been surprising. After all, Bear was supposedly the only investment bank that also balked at providing assistance to Long Term Capital in that 1998 fiasco.) At the same time, Bear's mortgage business was struggling because of the broader sup-prime mess; and other revenue sources, like advisory business, were probably also suffering. Perhaps, most importantly, funding costs paid by Bear started to rise. For a leveraged institution, uncomfortable clients, contracting business and higher costs are not a good combination. At the end of the day, warning signs were there, but Bear's management did not do enough; and at the end of the day, they "bear" the primary responsibility for the firm's failure. To be honest, they should consider themselves fortunate that the Fed treated them better than they treated some of their clients.

[dtal311]

WOW- what an A-Hole. Ruins peoples future retirments and has the guts to blame others. Would love to meet this guy in a bar and tell him how the real world works!!

Wall-Street CEO's with their hands out to the feds taking tax-payer dollars to cover up their GREED!!!

[WIpatriot]

Calling Bullshit! Calling Shenanigans! Everybody grab your brooms!

[maggiemae656]

Can you imagine one of his employees using such a sorry excuse? Cleaning toilets? No, he need closer supervision than that. His type needs to be watched every second on the job so they don't have an opportunity to come up with lame excuses--all work performed by this type needs to be witnessed and verifiable at all times. Hey, I think a chain gang would be pretty appropriate.

[WIpatriot]

People like him belong in jail.


You hear me, Mr. President?

[hoopesaz]

hahaha...liberals want everyone in jail except criminals.