Many Bear Stearns loan desk employees are expecting to be let go by the time the firm gets bought by JPMorgan Chase, according to a banker on the loan desk. “We’re just waiting for JPMorgan to come in and see what it needs and what it doesn’t need. [The loan business] is definitely a business they don’t need at all. They already have one and it’s one of the biggest in the industry. Best case, they take a few guys.”
“We are going under,” one staffer told Credit Investment News on Saturday. “There are a lot of people about to lose their jobs,” he added, noting he wasn’t looking forward to going back to work today.
Activity was slow in the Bear Stearns loan desk on Monday as most employees assumed the worst in terms of their job security, said a banker at the investment firm. The banker confirmed that JPMorgan will be taking responsibility in all loan trades, but declined to comment on specifics. One possibility is that JPMorgan may step in within the next couple of weeks and mandate trading limits to Bear Stearns traders, he said. In a conference call Sunday night, JPMorgan CFO Mike Cavanaugh said JPMorgan would be taking responsibility of all Bear Stearns trades. “We are also, effective immediately, providing a JPMorgan guarantee to all the trading obligations of Bear Stearns so all counterparties facing off against Bear Stearns should understand they are dealing with JPMorgan Chase on that basis,” Cavanaugh said in the call.
Loan traders said Monday afternoon the news impacted the loan market in a negative way. “It’s not pretty, I’ll tell you that much,” said a sellside trader. “The market has dropped from one to two points in the over all general [loan] market.”