Bear Stearns Employees Facing Uncertain Future

The cries and wringing of hands at Bear Stearns is understandable. Some employees were left with retirement accounts near worthless at a $2 per share price. Employees of the near- failed financial house invested heavily in their company, and much like Enron employees they are now facing not only job insecurity but a future with little savings.

How could a company that was chugging along one year become a boat anchor the next? I am not an economist, but I would have to say the real root cause is greed. The sub-prime market was a way to make a lot of money but it carried big risks. On paper analysts looked at the growth curves and projections without ever going out into the real world and seeking out the actual people taking out mortgages. If they had, they would have considered that the economy was not going anywhere and most people who could only qualify for sub-prime mortgages, were ill equipped to handle the escalating payments in the future. I believe the term for their existence was “fools paradise”.

Now the employees and stockholders of Bear Stearns are left holding paper that might be better used to recycle than valuable shares of stock. Though there has been much press about the buyout by JP Morgan, the move has yet to be approved by shareholders, so the jury is out on the future of the company.

The Federal Government is trying to aid the process, but there is only so much they can do. In the meantime bankers at the firm are hoping that other Wall Street giants like Lehman do not follow suit, otherwise there will be a glut of bankers looking for work. Perhaps Burger King can use some more cashiers? It would be a sad but educational awakening for these over paid money changers to spend a little time in the real world where American’s live from paycheck to paycheck. Maybe some brave firm will even lend them money at a special introductory rate?