Less Is More
“Abandon all hope, ye who lunch here!” is written on the faces of almost everyone in the lobby of Bear Stearns. On the faces of the old white man in the tweed suit and the four short Indians in rumpled shirts. It’s even written on the features of the Wall Street Adonis for whom squash just didn’t do it today.
It’s written on the face of everybody except the press woman from JPMorgan. She’s tall and blond and beautiful and wearing a white suit, as if to send a message. And she’s moving through this lobby as if it is the land of opportunity, and for her, it is. There are new empires to be staked out in this building. There are great troves of treasure to be found—for her. But for everyone else? Well, they have some very cool chairs.
Ludwig Mies van der Rohe’s Barcelona chairs sit empty in a corner of the vast granite room, which feels like a first-class airport lounge on the day of the last flights out of a country that just lost a war that it needed to win. No one sits in the chairs because everyone is too busy arranging their escapes. Looking at the empty chairs one cannot help but think of the unspoken costs of American prosperity, the crookedness of the markets, the hollowness of capitalist promi—
“Do you think I can get one of those chairs?” It’s my friend Molton Brown, who works at a private-equity firm and arranged for me to be smuggled inside of Bear today for the curiosity of lunch at a falling colossus. The firm is not exactly hungry for press coverage at the moment, and sneaking a reporter inside a Wall Street firm is a high crime even in good times. Molton Brown has asked to be referred to under a pseudonym, and understandably so.
Who is Molton Brown? Well, he’s very into luxury goods, personal grooming products, and modern art. He owns two loofahs and keeps three types of Molton Brown body wash (“re-charge black pepper,” “heavenly gingerlilly,” and “warming eucalyptus”) in his shower. And today he’s wearing a gray bespoke suit and a fine broadcloth shirt and an Alexander McQueen trench coat that makes him look like an haut bourgeois Inspector Gadget.
Some people would see in the Bear Stearns lobby only dashed lives and empty hope. Molton Brown sees those things—he read up on capitalism’s failings before buying his first Basquiat—but the capitalist impulse is a stubborn thing, and what he is most aware of right now is the possibility of heavily discounted designer furniture. In his mind he hoists a Barcelona chair on his shoulder, offers a $20 to the security guard, and makes for the street.
I find myself wanting a Barcelona chair, too. I recall video footage I once saw of Bulgarian students looting the parliament building in Sofia during the fall of the Soviet Union, and figure that the urge to get away with stealing things during the crowded hours of crisis must be a very basic part of who we are. How else to explain the market’s broad approval of JP Morgan’s acquisition of Bear Stearns for $2 a share, hastily arranged over the weekend and almost fully guaranteed by the Federal Reserve?
“Less is more,” said Mies van der Rohe, which is a fine insight for an architect, but one that would come as no consolation to the man receiving us here today, who soon arrives from the floors above to usher us inside. He works in markets at Bear and has been successful, but not so successful that he doesn’t fear for his corporate life at this perilous moment. Like Molton Brown, he has requested a pseudonym. And how could I refuse him one? He is, after all, Our Host.
Our Host takes us through the lobby and narrates the scene: Bear Stearns is a sinking ship, and everyone is looking for a life raft. Thousands of layoffs are expected in the coming weeks. No one can understand how it became so worthless, so quickly. How it all disappeared.
“The prime brokerage unit alone was worth $25,” he informs. “They moved it over to JPMorgan this morning. It’s gone.”
The real looting, it seems, has already been done. Perhaps Molton Brown has a chance at the lobby furniture after all.
Prospects in Brazil
Our Host takes us up to the second floor, where lies the company cafeteria and also the conference center. Today Bear was set to host an energy conference—oil companies, mainly—and the second floor should have been packed with men and women fresh out of the 10:55 panel presentation: “Advances in Deepwater Technology,” eagerly awaiting the 2:45 presentation: “Risk and Opportunity in the Middle East Geo-Political Landscape,” and especially looking forward the 4:14 panel: “Prospects in Brazil: Peak Oil Postponed?” The problem is that over the past three days, people here have learned more than they ever cared to know about the topic of the 12:05 panel presentation: “The State of Credit Markets and Its Potential Impact on M&A Deal Flow.”
Jeroen van der Veer, the CEO of Royal Dutch Shell, was set to deliver a keynote address in a few minutes, but now no one much cares. Today the head of one of the world’s largest oil companies has been overshadowed by the co-heads of JPMorgan’s investment bank, Steve Black and Bill Winters, who will tell the Bear Stearns senior managing directors what fate holds in store for them later this afternoon.
Until then, the lunch offerings of the company cafeteria are for most a far more attractive prospect than anything in Brazil or the Middle East. More compelling even than the wisdom of Jeroen van der Veer.
Because Bear Stearns may be worth only $2 a share, but that doesn’t mean that place doesn’t still have an amazing salad bar.
“The feta cheese? Some chick peas. Green peppers? Green peppers. Roasted chicken.”
The man ahead of me in the salad line is roughly my age, 29, but his karma feels a decade older. A feeling of powerlessness can make small decisions take on greater meaning, and he is really considering every component of today’s lunch.
“You get one more veggie, baby,” the woman behind the counter tells him.
It’s true. You get four vegetables and one protein for $4.95 at the Bear Stearns cafeteria, an especially generous deal from a firm that, by some estimates, has a net worth in the negative billions. Today’s lunch is theoretically subsidized by the Federal Reserve by way of JPMorgan, a disturbing notion for a nation that prides itself on free markets, but one that means little to the man ahead of me.
He has one more veggie to choose and aims to choose it well. “I’ll have a few of those raisins,” he says at last.
I have a salad, too, then meet Molton Brown and Our Host at the cashier. Molton Brown has gotten himself a subsidized sandwich—tomato and fresh mozzarella on ciabatta. Our Host has gone with asparagus and fettuccini on a bed of polenta. Ruin has never been so refined.
All around the cafeteria, people gather at tables and speak in hushed tones about what has happened. We take a table and join in the huddled whispering.
“This was the best deal?” asks Our Host, in disbelief, of Bear’s sale to JPMorgan. “Because if this is our fate, I can’t think of any worse scenario. Some people are saying bankruptcy would have provided more value down the road.”
I ask what he is hearing from Bear’s management about the deal, and his future.
“Just e-mails saying you’re still gonna get your check and your benefits. Also saying we have life coaches around if you want to talk about financial matters.”
Bear’s universe-masters are now taking advice from life coaches. The cafeteria has a deflated feel, like a resort at the end of high season in advance of a hurricane. Our Host looks across the thin room and into the windows of JPMorgan’s 270 Park Ave. headquarters, just across the way.
“Some floors know that they will be completely wiped out. Other floors may stay around. It just depends what JPMorgan wants. These were financial weapons of mass destruction,” he says, alluding to Warren Buffet’s famous line about derivatives. “Everything has a cloud over it right now—of fishiness.”
He hasn’t touched his polenta, or his asparagus, or his fettuccini.
Art of the Deal
Soon we are in an elevator going up to the 12th floor and the executive suites. The doors open on a sumptuously carpeted, wood-paneled lobby whose walls are lined with the paintings of great 20th-century artists.
“Jesus, there’s a David Hockney,” says Molton, pointing to a painting done in wild shades of pink and green and purple. “They’ve got a Richard Serra, and, over there—is that a Lichtenstein?”
He inspects the paintings, hanging each in some space on the wall of his mind, above a looted Barcelona chair. There are very powerful men here—or at least men who were very powerful—and none of them objects as he moves from painting to painting, commenting and appraising. For all they know we could be from Sotheby’s or the JPMorgan art collection.
“This is where it all happened,” says Our Host, with some disbelief, of the space in which the weekend’s negotiations were held.
“We should probably get going,” he continues, eager to leave this very surreal place in which the art on the walls has suddenly become worth more than some of the business lines that purchased them. Less is more.
“Can we see the trading floor?” I ask, and he agrees that we can.
The Ghost Floor
A 30-foot-long LCD screen rolls a red stream of stock quotes across the back of the trading floor, punctuated only by blips of green—the prices of rival banking stocks all trading up on the news of the federal reserve’s 75-point interest-rate cut and Bear’s averted bankruptcy.
The rallying share prices of Goldman and Lehman are sore reminders of what might have been for Bear’s employees, of what might have been had they just held out a bit longer; Bear’s traders should be cursing the ticker, throwing things at it, but as it happens, not many of them are here.
Their computer screens are dark, and their chairs are empty. A lot people are already out interviewing for new jobs. Others have opted to stay home in the comfort of their own sofas. A few try to work but seem absurd for doing so, like the Japanese soldiers they found on those islands in the ‘60s, still fighting the war in the Pacific.
“You see how people are standing and talking?” says Our Host. “That means they’re not working. Generally, you don’t see people standing like this in the middle of the day. But nobody’s trading with us …”
I have never seen a place like this so sparse and quiet on a random Tuesday in March. It is disturbing just how quickly the wheels of things seize up.
I take out my BlackBerry for a portrait of this trading floor that has become something else, a negative space, but I prove a bumbling spy: I look too intently into the screen, and I wait too long to get the shot right, and by the time I am done, I have drawn the attention of the standing men, who now begin to look over at us, to wonder what we are doing here.
“We should go,” says Molton Brown.
Down in the lobby we wish Our Host luck in finding a new job, in landing wherever he is to land. Molton Brown eyes the still-empty Barcelona chairs greedily, but the theft is not to be. At least, not today.