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August 1, 2008 11:30AM
Exclusive Bear Bombshell: Tell-All Book By ‘Anonymous’ Places Blame for Killing of ‘the Bear’
By Liz Claman

Hey gang,

You KNEW it was coming: the tell-all book about the disastrous fall of Bear Stearns. Well, IT’S HERE. This morning I reported on Fox Business (see clip below) that we are the first to have gotten a copy of the unpublished manuscript. It’s got some blockbuster revelations and beliefts in it because it was written by a Bear Stearns high-level INSIDER who watched the whole Into-Thin-Air-Mt.-Everest-type-disaster unfold right before his eyes. How? BECAUSE HE WAS A SENIOR MANAGING DIRECTOR on the Derivatives desk, right there at Ground Zero of the Bear implosion. He’s not a journalist or Vanity Fair reporter—HE WAS THERE.

The book is called “Bear Trap: The Fall of Bear Stearns and the Panic of 2008″ (BrickTower Press 2008) and as I said, is written by “Anonymous” along with co-author Andrew Spencer. How did I get my hands on only one of 4 unpublished manuscripts in existence? Sorry, can’t tell you, but let’s just say that one of my best sources on the Street had it. The minute I opened it I knew it would be quite the ride. It’s 350 pages of the minute-by-minute account of those heart-gripping, mind-blowing days in March when suddenly all confidence that was left in the nation’s 5th largest brokerage ran for the exits. “Anonymous” makes the case that leaked emails out of Goldman Sachs gave enough people enough information to start heavily shorting the stock to make major money off Bear’s demise. Keep in mind that, at the time, Bear was said to still have $17 Billion dollars in cash on the books but the authors say as soon as someone at Goldman pressed “send to all recipients” on one particular email that indicated it would no longer serve as a go-between for investors and Bear, Bear didn’t stand a chance. It was trapped and bleeding. Not even chewing its own leg off could get it out of that trap. The authors also believe that Treasury Secretary Henry Paulson may have held a grudge against Bear dating back to the bailout of hedge fund Long Term Capital Management back in 1998. Back then, Paulson was the CFO of Goldman Sachs which helped with the LTCM bailout. When asked to join the “Let’s-save-LTCM-for-bad-bets-it-made” party, Bear flat out refused to participate. Did Paulson have a long memory? Did he try a little less valiantly to save Bear because Bear wouldn’t save LTCM? Fox Business spoke to the Treasury Department’s press spokesperson Brooklyn McLaughlin this morning who issued this statement: “Department of Treasury hadn’t seen the book and declines to comment”

Many Wall Streeters tell me a Paulson grudge is highly unlikely, that in a way, Paulson DID save Bear by facilitating with the Fed the sale of Bear to JPMorgan. But the insider and a lot of other traders on the street to whom I’ve spoken feel differently. Maybe we’ll never know, but “Anonymous” also goes into great detail about the mistakes Bear itself made, so this isn’t a total “Let’s blame Paulson and Goldman” book, but the most riveting parts are about the minute-by-minute demise of the stock that week in March, Bear’s attempt to stem the blood flow, how the forced wedding to JPMorgan went down Sunday March 16th, and how Monday March 17th became “Dawn of the Dead.” Bear, in the blink of an eye, had been sold “lock, stock and barrel for 2$ a share…less than a cup of coffee at Starbucks.”

So once I had it, I had to call BrickTower Press. Needless to say they were stunned to hear that a reporter had gotten a hold of it. But for a boutique publisher who’s best-selling book up until this point was “Gardening in Deer Country,” they were pretty cool about it. Because the galleys are being mailed to book critics and literary reviews TODAY, they knew the clock was ticking. They have allowed Fox Business to use quotes in a limited number. We thank them.

We’ll be following the story all day long, I’ll be revealing quotes throughout the day with response from market watchers and former Bear Stearns employees, along with expert short-sellers and former SEC prosecutors. BrickTower says it’ll reveal the identity of “Anonymous” on or around September 22nd, the date of release, but of course feel free to start guessing his identity now. The book is now available for pre-order on Amazon. I predict that however many copies they’ve ordered, they’ll have to order more. Bear’s collapse will be written about for years, but the Insider perspective is valuable and riveting… and no doubt will cause many to stop and really wonder whether Bear should have been allowed to die in that trap.
http://liz.blogs.foxbusiness.com/2008/08/0...all-of-the-bear

http://en.wikipedia.org/wiki/Bear_stearns

Get ready, wikifolks. minor shite sturm on the horizon. That article is going to make naked short selling's brouhaha look like Elbow Bondage pretty soon. In the latest installment of Short & Distorting for fun and profit$: