October 4, 2007
Lessons from the credit squeeze
Column on the Financial Times comment page, October 4th
This was the week that Chuck, Marcel and Josef stepped into the room.
After two months of fear and paralysis in capital markets, started on August 3 by a memorable Bear Stearns conference call with analysts to reassure them that it was not going bust, Chuck Prince of Citigroup, Marcel Rohner of UBS and Josef Ackermann of Deutsche Bank each disclosed terrible results. Instead of sliding further, shares in the banks rose because their investors now believed they knew the worst.
Bear’s call included an admission by Samuel Molinaro, its chief financial officer, that market conditions were as bad as he had witnessed in 22 years. But the moment that spooked some investors was when an analyst tried to question Jimmy Cayne, Bear’s chairman and chief executive, who had opened the call with a calming statement. “Jimmy stepped out of the room,” said Mr Molinaro.
The rest of this column can be read here. Post comments below.
