Bearing bearish bear stearns

Yesterday at the career fair, i spoke with some representatives from Bear Stearns, though they were only looking for career positions, i feel i was able to gain valuable insight upon the inner workings and environment of the firm.

I am quite surprised such a "prestigious" company would send desk controllers who have been working there for years that were quite unable to defend their company fundamentally or in an decent manner to convey confidence for todays earnings report. I mentioned that they have been headlined quite a bit in the past, and automatically in natural human behavior these controllers automatically i assumed i was attacking them and they reverted into some subprimal mode, and defended their great honor with the toddler defense. "Well we are not the only ones who have problems, everyone else is too..." i soon expected to see tongues flying in my direction. I am not to sure if thats how you respond to a major debt holder or share holder question who needs answers to see if they have made the right choice in the end. They further went to tell me that "we are known as a conservative firm, and we decided to risk more and we payed the price..." another explanation along those lines. What i heard was, we are a firm lacking in discipline and blindly dove into a risky investments just because all the major investment banks were also doing it, and we lacked the foresight to properly hedge our assets, well because... we simply didn't know..." After that they discussed how one of their "senior VP's came down to talk with EVERYONE personally, to reassure everyone that everything was going to be fine for the upcoming earnings report." This can be scene as a double edge sword, this can show that management actually has a grip on things and knows how to control their employees psychology, to inspire this sense of security (wheather fake or not, just look at the Enron environment) . Further noted by the desk controllers is that the executive did not simply send out a memo or a email saying all was fine but personally told everyone in person. Honestly doesn't that sound alarming? If an executive comes to talk to you personally, take time out of his massively busy schedule, you know there a serious problem, whether the problem be the stop or rampart fear from spreading, or to guise the truth as they try to sort it out.

Though Honestly all in all, Bear Stearn has had its days, and is a solid firm over all, Perhaps it has learned from its past mistakes, and will build a stronger foundation now. I asked about how the desk controllers felt about the environment, whether it was relaxed or more stressful and tight. They strongly emphasized to me that it was a more laxed and relaxed work environment... that may seem kind of troublesome, but considering the area of work they were in, im sure it is what prompted that answer.

Based on a purely information, sentiment, aspect looking at no technicals or fundamentals, i expect earnings for Bear Stearns naturally to be affected by the current credit and mortgage conditions, and post lower than expected earnings. To the degree that this significance, i feel it does not weigh to heavily on the overall future performance of the fund as long as they can stick to a discipline that works, and not loose way as before.