I can’t say I agree with Felix Salmon and John Carney that the most interesting anecdote in the great New York Times piece about the feud between Alan Greenberg and Jimmy Cayne at Bear Stearns was the following:

The final straw for Mr Cayne was Mr Greenberg’s decision to charge Mr Cayne a commission of $77,000 for the sale of his six million shares of Bear stock, a rate far above the maximum $2,500 commission that employees pay for a single trade. Since Mr Cayne was not an employee anymore, he did not deserve such a rate, Mr Greenberg said. “If he doesn’t like it, he should do his future business elsewhere,” he added.

Actually, I prefer this one:

Mr Greenberg says he did contemplate leaving, in part because his views were not being heard and for another reason as well. “I was depressed. My dog was sick,” he said. “He had not been performing well in dog shows.”

I think that, while the first story speaks well to the pettiness that can erupt between two old friends and colleagues when an institution disintegrates, the second says something about the oddity of Bear’s executive culture.

The lesson, I think, is that both men were too old and out of touch to be in charge of their institution, particularly in a time of turmoil.

Mr Cayne, 74, was chairman, but was seriously ill last summer and spent a lot of time out of the office at bridge tournaments as Bear crumbled. Having been around for so long - and been originally hired by Mr Greenberg when he was earning his living playing cards - he lost touch with his responsibilities.

Meanwhile, Mr Greenberg, who is 80, was revered for his past leadership of Bear and for his witty, irreverent manner. That is fine, but he was allowed to remain chairman of the risk and executive committees, which was ridiculous.

I wrote in a column that Bear’s leadership was “old, self-satisfied and inbred”and this article provides no reason to change that view. I imagine a lot of employees must wish a plague on both Mr Greenberg’s and Mr Cayne’s houses.

My FT column this week is about Michael Milken and his defence at the Milken Institute Global Conference of high-yield finance in the wake of the subprime mortgage crisis. I think he gets some things wrong but is correct about one big thing.

You can read it here and comment below. Incidentally, Andrew Ross Sorkin of the New York Times is at the conference and wrote about the same topic earlier this week, so you can compare and contrast here.

Amid all the financial confusion, one things seems clear enough: the days of the $10bn plus leveraged buyout are gone for now.

Even when the backlog of unsyndicated high-yield loans held by banks is cleared - which now looks like will happen fairly quickly - they are not going to be rushing back to the private equity funds to offer new multi-billion facilities.

The reason for that is not simply that they have been burned by the events of the past year. More concretely, they can no longer package up mezzanine and secured debt for buyouts and transform it into collateralised loan obligations (CLOs).

This was the unanimous conclusion of a panel on private equity this morning at the Milken Institute Global Conference, which included Leon Black of Apollo Advisers and Thomas Lee of the eponymous private equity group.

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All does not appear to be well in the venture capital industry, to judge by the move by Sequoia Capital, one of Silicon Valley’s most prominent investment firms, to broaden its business to include everything from shares to property.

That follows shifts by two of the UK’s longest-established venture capital firms - 3i and Apax Partners - away from early stage investing and towards buy-outs of established companies.

Sequoia’s move would make it look more like one of the private equity firms, such as Blackstone and Carlyle, which have raised funds to invest in all kinds of assets. Property investment has been Blackstone’s highest-return business.

But the fact that Sequoia may follow is a big symbolic shift. Under its lead partners Michael Moritz and Doug Leone, it has been an early investor in many of the biggest Silicon Valley successes of recent years, including Google, Yahoo and YouTube.

If even Sequoia is feeling the need to diversify, what does that mean for the rest of the venture capital industry?

My column in the Financial Times this week is about the need for better incentives and simpler regulation of investment banks, rather than a vast new regulatory infrastructure and set of rules. You can read it here and comment below.

So far so good - or at least, not too bad - seems a fair assessment of how the financial crisis has so far treated hedge funds. Although some have collapsed, including two managed by Bear Stearns, and others have hit trouble, they have generally done better than big financial institutions.

One hedge fund manager I talked to this month estimated that hedge funds with equity of about $15bn had so far been mortally wounded in an industry that now manages $2,000bn of assets. He compared this to financial institutions such as Citigroup and Merrill Lynch (and now Bear Stearns) that had suffered more.

But I do not think we have yet seen the full impact of the financial crisis on hedge funds. As banks that have kept hedge funds in business by lending them money and providing other services pull back - and it becomes much harder to leverage equity with debt - some funds will face a colder climate.

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I am afraid that I forgot to post a link to my column on Saturday in which I tried to explain to Weekend FT readers that Bear Stearns employees really were suffering from the collapse of their institution. The email responses I received were equally split between those who thought I was too kind, and those who thought I was too harsh, to Bear. You can post comments below.

Hmm. Well, we have now seen the terms of the JP Morgan’s revised $10 a share offer for Bear Stearns and I do not think it is a good outcome for the Federal Reserve.

The Fed does gain something from the new deal - JP Morgan takes on liability for the first $1bn of losses from the $30bn portfolio of illiquid assets that it guaranteed as part of the first agreement.

In return, however, it is allowing Bear shareholders to get five times the original price for an investment bank that was in effect insolvent 10 days ago without the backing of the taxpayer.

We have moved an awfully long way from 1998, when the New York Fed was criticised for simply calling a meeting of Wall Street banks to organise an attempted rescue of the hedge fund Long-Term Capital Management.

This time, the Fed has not only committed public money but has allowed the deal to be renegotiated in a way that grants Bear’s shareholders a bigger reward.

The Fed can argue that the structure of the new deal is in some ways preferable and the Bear shareholders still get relatively little for their equity. From that point of view, the Fed has minimised moral hazard while keeping Bear afloat.

The fact remains that it has been dragged into a public fight involving JP Morgan and Bear shareholders and has had to accept a further compromise. That cannot be a good thing for its authority.

Is JP Morgan about to give in to Bear Stearns’ angry shareholders and offer five times its original $2 a share price?

So Andrew Ross Sorkin says in the New York Times this morning:

Under the terms being discussed, JPMorgan would pay $10 a share in stock for Bear, up from its initial offer of $2 a share — a figure that represented a mere one-fifteenth of Bear’s going market price.

The Fed, which must approve any new deal, was balking at the new offer price on Sunday night after several days of frantic, secret negotiations, these people said. As a result, it was still possible the renegotiated deal might be postponed or collapse entirely, said these people.

I do not understand how the Federal Reserve can stand behind the deal on anything like the original terms if JP Morgan is going to pay more.

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Things happen very rapidly in a crisis. A week or two ago, the Federal Reserve was still hesitant about providing back-up finance for investment banks on the same terms as the banks it regulates.

Now, the Fed has not only extended back-up financing to Wall Street primary dealers following the Bear Stearns collapse, but has its sights set on taking over their regulation from the Securities and Exchange Commission.

It makes sense for the regulatory division that mirrored the Glass-Steagall Act separation of banks and brokers to break down now that banks and investment banks compete directly with each other.

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