A Bare Sterns Story
He called in sick one day, unable to take the pressure. Being a broker was no fun anymore. Instead of reading the Journal for pleasure, it had become a chore ridden with anxiety. His poetry production had dropped to zero. He could not even write a Haiku. He was having trouble enjoying other people’s poetry, and started finding his bohemian friends irritating. Some had even started asking him for stock tips. It seems many of them actually were living on inherited investments, which is why they could afford to be San Francisco poets.
The day Bruce called in sick people began to wonder about his recent recommendations. Just to be on the safe side, they reversed their positions, which mainly meant they were selling. Other market watchers noticed the selling and began to wonder if a number of recent rumors, that had seemed so substantial yesterday, might not just be bull. They had made their short term profits, so they baled out.
By mid morning selling had become particularly heavy in technology and defense stocks. By noon some consumer goods companies were suffering as well. At market close the averages were showing their largest percentage drop for the year. Bruce, in those days before the internet, knew nothing of this. He was eating lunch in a Polk Street café when the market closed at 4:30 PM Eastern time, 1:30 PM San Francisco time. He learned about the drop in the business section of the afternoon paper. The San Francisco Examiner attributed the selling to “investors taking profits on concerns about ongoing inflation and belief that the Federal Reserve will continue to raise interest rates.”
Steve took another sick day. When he returned to work, on a Friday, he came in quite late, so no one was waiting for him. He did not take the Wall Street Journal. He dusted off his list of institutional clients and started calling through it. They were not mad. Since they had not been trading under his guidance, they had not lost money in the meltdown. They were fine.
The following Monday a new, permanent manager came to the San Francisco office. He looked at productivity reports. There was a black hole in the office. Bruce Peck’s customers were hardly trading at all. Because they were not trading, they were not generating commissions for Bare Sterns. This defeated the whole point of having them as clients. Getting an account like a retirement pension fund to trade could generate huge commissions, since they were dealing with huge amounts of money.
When the new boss’s secretary made an appointment for Bruce to review his work, Bruce figured he would be fired. There was a slight possibility that he would be allowed to stay on if he got to work. In any case he decided it was time to leave the stock brokering business. He considered his options. Another job would be just as bad. He could not think of any job he wanted. He could get unemployment for a while, but the main choices seemed to be between jobs where the pay was low and jobs where responsibilities were high, if there were any jobs at all. He had not even paid off his student loans yet. Since he had not urged his clients to trade, he had not received any salary based on commissions, only base pay. Which was plenty as long as he worked, but not enough to set him up for the future.
Bruce confessed to his sins the next day. The boss man did not even seem upset. He just wanted Bruce to start generating more commissions. He had talked to a number of the clients, who really liked and trusted Bruce, they had done so well under his guidance. They were prepared to trade on his recommendations, if only he would give them. In fact, with more trading, Bruce would make more money. Wasn’t that why Bruce had become a broker?
Bruce told him how he had been thinking of going back to law school, and might as well get on with that.
And so when brokers went into the San Francisco office of Bare Sterns there were two Wall Street Journals available at the reception desk again. Other oracles and portents had to be substituted for Bruce’s cryptic excuses to get to his office and close the door.
Bruce enjoyed his life as a poet in San Francisco until the following September. He entered his second year of law school in New York City older and wiser. He did well, gradually forgot about poetry, and sank into the quagmire of the law.
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