Investment Banking in 2008 (A)Rise and Fall of the Bear

 Posit: People think a bank might be financially shaky. Consequence: People start to withdraw their money. Result: Pretty soon it IS financially shaky. Conclusion: You can make banks fail.

 —Sneakers (1992)

Gary Parr, deputy chairman of Lazard Frères & Co. and Kellogg class of 1980, could not believe his ears.

“You can’t mean that,” he said, reacting to the lowered bid given by Doug Braunstein, head of investment banking at J.P. Morgan Chase, for Parr’s client, legendary investment bank Bear Stearns. Less than eighteen months after trading at an all-time high of $172.61 a share, Bear now had little choice but to accept J.P. Morgan’s humiliating $2-per-share, Federal Reserve–sanctioned bailout ...

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