New York Real Estate and the Bear Sterns Effect

[patientlywaiting]

I read that employees had a 30% stake in the company in the forms of 401k and direct investments.

By my calculations that’s 35.43 million shares at a one-time previous $170/share or $6.023 billion valuation. Now that value is gone.

Imagine all the employees of Bear Sterns who pledged their shares as collateral for loans to enjoy a nice lifestyle.

Out of their 14,000 employees, how many will now be cash strapped? Or need to rebuild their savings?

My bet is that the vaunted Manhattan real estate market will get hit hard at the investment banks get hammered.

Time will tell.

[cr]

I’d guess that the company kicked in a little, and keep in mind not all shares would have been purcahsed at the $170 level.

Still, even if it’s only $3 Billion that’s a crap load of money that just vanished.

Sadly, upper management will walk untouched, probably with golden parachutes and severance packages, and go to work somewhere else for some insane salary.

Meanwhile all the lower level employees, who had nothing to do with the decision to leverage a sub-prime mortgage 13 times over will get nothing except a company pen and coffee cup.

This company needs new leadership on all levels.

[cr]

I’d guess that the company kicked in a little, and keep in mind not all shares would have been purcahsed at the $170 level.

Still, even if it’s only $3 Billion that’s a crap load of money that just vanished.

Sadly, upper management will walk untouched, probably with golden parachutes and severance packages, and go to work somewhere else for some insane salary.

Meanwhile all the lower level employees, who had nothing to do with the decision to leverage a sub-prime mortgage 13 times over will get nothing except a company pen and coffee cup.

This company needs new leadership on all levels.

[cr]

I’d guess that the company kicked in a little, and keep in mind not all shares would have been purcahsed at the $170 level.

Still, even if it’s only $3 Billion that’s a crap load of money that just vanished.

Sadly, upper management will walk untouched, probably with golden parachutes and severance packages, and go to work somewhere else for some insane salary.

Meanwhile all the lower level employees, who had nothing to do with the decision to leverage a sub-prime mortgage 13 times over will get nothing except a company pen and coffee cup.

This company needs new leadership on all levels.

[cr]

I’d guess that the company kicked in a little, and keep in mind not all shares would have been purcahsed at the $170 level.

Still, even if it’s only $3 Billion that’s a crap load of money that just vanished.

Sadly, upper management will walk untouched, probably with golden parachutes and severance packages, and go to work somewhere else for some insane salary.

Meanwhile all the lower level employees, who had nothing to do with the decision to leverage a sub-prime mortgage 13 times over will get nothing except a company pen and coffee cup.

This company needs new leadership on all levels.

[cr]

I’d guess that the company kicked in a little, and keep in mind not all shares would have been purcahsed at the $170 level.

Still, even if it’s only $3 Billion that’s a crap load of money that just vanished.

Sadly, upper management will walk untouched, probably with golden parachutes and severance packages, and go to work somewhere else for some insane salary.

Meanwhile all the lower level employees, who had nothing to do with the decision to leverage a sub-prime mortgage 13 times over will get nothing except a company pen and coffee cup.

This company needs new leadership on all levels.

[Coronita]

I think you're underestimating the amount of money investment bankers typically make. On a bad year, associate levels with about 5 years of experience (level right above entry analysts) including cash bonuses alone can make $300k+, and that might be underestimating, because that was what it was during the dot bomb implosion when IPO's dried up.

Granted the price of RE in Manhattan is incredibly expensive, we're really not talking about people who are going to starve to death. The people that are going to get hurt the most are those in BSC's support role (such as IT, admin, receptionists etc). But I doubt those are the folks RE owners in Manhattan to begin with, or for that matter,analysts below the $200k level.

My data is from relatives and colleagues apparently in the business. Sh!tty lifestyle, but that's why you're partly paid that way for that NYC lifestyle.

Another thing…I don't subscribe to the notion of foreign investors bailing out RE prices. BUT, I would say Manhattan RE is sought location, so I would be surprised seeing a fire sale in Manhattan, especially with a plunging US dollar.

 

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

I think you're underestimating the amount of money investment bankers typically make. On a bad year, associate levels with about 5 years of experience (level right above entry analysts) including cash bonuses alone can make $300k+, and that might be underestimating, because that was what it was during the dot bomb implosion when IPO's dried up.

Granted the price of RE in Manhattan is incredibly expensive, we're really not talking about people who are going to starve to death. The people that are going to get hurt the most are those in BSC's support role (such as IT, admin, receptionists etc). But I doubt those are the folks RE owners in Manhattan to begin with, or for that matter,analysts below the $200k level.

My data is from relatives and colleagues apparently in the business. Sh!tty lifestyle, but that's why you're partly paid that way for that NYC lifestyle.

Another thing…I don't subscribe to the notion of foreign investors bailing out RE prices. BUT, I would say Manhattan RE is sought location, so I would be surprised seeing a fire sale in Manhattan, especially with a plunging US dollar.

 

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

I think you're underestimating the amount of money investment bankers typically make. On a bad year, associate levels with about 5 years of experience (level right above entry analysts) including cash bonuses alone can make $300k+, and that might be underestimating, because that was what it was during the dot bomb implosion when IPO's dried up.

Granted the price of RE in Manhattan is incredibly expensive, we're really not talking about people who are going to starve to death. The people that are going to get hurt the most are those in BSC's support role (such as IT, admin, receptionists etc). But I doubt those are the folks RE owners in Manhattan to begin with, or for that matter,analysts below the $200k level.

My data is from relatives and colleagues apparently in the business. Sh!tty lifestyle, but that's why you're partly paid that way for that NYC lifestyle.

Another thing…I don't subscribe to the notion of foreign investors bailing out RE prices. BUT, I would say Manhattan RE is sought location, so I would be surprised seeing a fire sale in Manhattan, especially with a plunging US dollar.

 

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

I think you're underestimating the amount of money investment bankers typically make. On a bad year, associate levels with about 5 years of experience (level right above entry analysts) including cash bonuses alone can make $300k+, and that might be underestimating, because that was what it was during the dot bomb implosion when IPO's dried up.

Granted the price of RE in Manhattan is incredibly expensive, we're really not talking about people who are going to starve to death. The people that are going to get hurt the most are those in BSC's support role (such as IT, admin, receptionists etc). But I doubt those are the folks RE owners in Manhattan to begin with, or for that matter,analysts below the $200k level.

My data is from relatives and colleagues apparently in the business. Sh!tty lifestyle, but that's why you're partly paid that way for that NYC lifestyle.

Another thing…I don't subscribe to the notion of foreign investors bailing out RE prices. BUT, I would say Manhattan RE is sought location, so I would be surprised seeing a fire sale in Manhattan, especially with a plunging US dollar.

 

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

I think you're underestimating the amount of money investment bankers typically make. On a bad year, associate levels with about 5 years of experience (level right above entry analysts) including cash bonuses alone can make $300k+, and that might be underestimating, because that was what it was during the dot bomb implosion when IPO's dried up.

Granted the price of RE in Manhattan is incredibly expensive, we're really not talking about people who are going to starve to death. The people that are going to get hurt the most are those in BSC's support role (such as IT, admin, receptionists etc). But I doubt those are the folks RE owners in Manhattan to begin with, or for that matter,analysts below the $200k level.

My data is from relatives and colleagues apparently in the business. Sh!tty lifestyle, but that's why you're partly paid that way for that NYC lifestyle.

Another thing…I don't subscribe to the notion of foreign investors bailing out RE prices. BUT, I would say Manhattan RE is sought location, so I would be surprised seeing a fire sale in Manhattan, especially with a plunging US dollar.

 

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Author]

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