A Bare Sterns Story
August 2008
by William P. Meyers

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It is true, or mostly true, at least the part about Bruce Peck living in San Francisco in 1979 and working at Bare Sterns. And then again with time the story is bound to grow even more apocryphal, especially now that Bare Sterns went under in 2008. It could have happened at some other investment bank or brokerage house, but in reality it happened where it happened. Most of the story came from Bruce himself, but he stopped telling it as he climbed the ladder of respectability.

After college and a year of temp jobs, including some paralegal work, Bruce attended NYU Law School. He found the first year of law school difficult. The reading load was heavy, certainly, but that was compounded by his finances. He was not from a well-off family that could help him, so he was living like a pauper yet running up debt like a decadent Polish aristocrat. He described law school as a re-education boot camp where any humane values were crushed out of students. After hearing from a friend that brokerage houses were eager to hire law school drop outs, he put in applications. He was perfect, at least as interviewed, for Bare Sterns. From a working-class family in New Jersey, smart enough to have graduated with honors from an Ivy League college, eager to make some real dough instead of blowing his youth on something as mind numbing as law.

He went through the broker training just fine and got his license. Bruce was not put in a boiler room; he was placed into a department that dealt with institutional investors. Suddenly money was running into his pockets instead of running out. Still, he was not all that happy in the new job or in New York City. He had the bohemian wanderlust. Secretly he was a poet. In fact his college degree was in English literature, which is why he had thought he had to go to law school to get a decent job. He knew there was no money and little fame or fortune to be made in poetry, but he favored the lifestyle. Anyway he got a hankering for San Francisco, which still had a Beat/Hippy aura about it in the late 1970’s, before it became siliconized. The idea of being on the bum, or at least going back to temp work in San Francisco, started to seem pretty good compared to sitting in a New York City brokerage office buying and selling stocks for clients back before they could do it for themselves on the Internet.

Lucky for Bruce, there was an opening in the Bare Sterns San Francisco office. In the brokerage world the only way to trade up in geography if you are in New York is, just maybe, to spend a few years in the City of London. Brokers in San Francisco who want to be where the real money is move to New York City, if necessary by way of Chicago or Los Angeles. Bruce was barely out of the brokerage training womb, but being in New York already he outranked the other Bare Sterns employees asking for transfers from places like Santa Rosa and Modesto, and so he was given the San Francisco job. The New York office did not mind; Bruce was not producing as well as had been expected. They liked him, but his heart was not in the finance game.

When he arrived in San Francisco he talked to the head of the office and was given a portfolio of mostly institutional investors he was supposed to take care of. That meant he was supposed to get them to trade as much as possible, thus generating commissions, without actually losing any of their money, on average, which would cause them to go elsewhere and dry up the sweet commissions that are the water of life to brokers.

While the positions of the stars and planets on the day of Bruce’s arrival are almost indisputable, and the effects of planetary alignments on various human events can be argued to be causal, whether any action or reaction to the planets is good or bad for an individual like Bruce is too deeply buried in past and future contingencies to unravel. As it was, the very next day after Bruce’s arrival, the head man at the San Francisco Bare Sterns office announced it was his last day. He was had taken a job at a rival brokerage house. Then it was two weeks before a new guy arrived to be in charge of the San Francisco office, and even he was only there as an office manager, not to lead the team of brokers and traders. He did not realize Bruce was new and might need further training or supervision.

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