Feed the Bear

One of the most remarkable stories I've read in a while is about a subject I usually detest: finance. (That might sound funny coming from someone who works at a business publication, but, you know, sometimes jobs pick you, not the other way around.) Reading "Bringing Down Bear Stearns," I learned how the art of business writing can actually be an art. Granted, my very own BusinessWeek helped break the subprime mortgage story wide open, but while that story (and the subsequent ones) were all fine examples of journalism, I don't know if I would qualify them as "art," necessarily. This takes the collapse of a financial institution and turns it into drama. It gives its characters--whom I would normally find utterly reprehensible, billionaires cushioned against the crushing blow of an elevator freefall by the bodies of their own employees--depth and pathos.

Also, for someone who works at a business pub, I know a surprisingly small amount about the business world. Yeah, I remember a bunch of stuff from AP Macroeconomics. But that doesn't even begin to scratch the surface of what's going on in today's world. Hedge funds, options, derivitives. These things make no sense to someone like me. Of course, I know much more now than I did before, but it still boggles my mind, the amount of money these Wall Street people win or lose on a daily basis. Most of it isn't even money. It's the promise of money. That's what's most confusing. How can betting that the price of corn is going to fall gain you money? That...is kind of fucked up. You are not providing a service to anyone. You're like a hyena laughing as a zebra gets taken down in front of you. But you somehow profit. It's patently ridiculous.

Don't get me wrong, I'm not a hippie or anything. I know this is the way the world works now, and there's almost nothing we can do right now, save wait for all the other hedge funds and the like to collapse under the weight of their own cleverness. (This might never happen, but hey, you never know.)

Perhaps the best (and worst) thing about the Bear cautionary tale is that nothing was really wrong with Bear. How did it get taken down? Probably by a group of people very similar to those working within the company. They started a rumor, a rumor that Bear was "having liquidity issues." Bear didn't have enough cash. They did (at least, according to Bear execs, they did), but those rumors are just as poisonous as the ones on Gawker, apparently. Addressing a rumor like that only makes it worse. $18 billion worse, sometimes.

Someone made a lot of money betting Bear would die.

So, for all the business world's talk about nothing being personal, I bet I could find 14,000 former Bear employees who would strenuously disagree. And I bet they'd say something about accounting for human instinct and emotion in your business model.

(Also, can you imagine calling up the Fed and asking for a $30 billion loan? Jesus Christ.)