BizJournals Portfolio
Jun 21 2007 12:00am EDT

Bear Stearns: The Satire Begins

This is hilarious.

Bear Measurisk uses a robust analytic framework built around a Monte Carlo simulation based Value-at-Risk (VaR) analysis and runs off a Lotus 123 spreadsheet and an old IBM 286 PC. For corporations, Bear Measurisk offers an earnings-at-risk model and a FAS 133 application to assist in calculating and reporting fair value (mark-to-market) for derivative instruments and underlying (hedged) exposure although when it comes to valuing our own CDO's, we just make the numbers up until we are found out. Like now.

A huge tip of the hat to Fintag, and do go read the whole thing.

Oh, and by the way, that Euromoney award to Bear Stearns for Best Risk Management? It's real. The winner of the 2006 global best risk management house award was actually Deutsche Bank. And the best investment bank was Merrill Lynch. But Bear Stearns did win both best risk management and best investment bank in North America. This part rings ironic today:

Bear Stearns has emerged as best risk management house of the year for... by acting as a real genuine broker-dealer – rather than a competing hedge fund/giant prop desk masquerading as a broker-dealer.

Maybe Bear should have started believing its own hype. That might have prevented it from starting its own hedge funds, and ending up in today's almighty mess.


Comments

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.


Connect With Portfolio.com

Come on, like us—you know you want to.

Follow us and if you're an innovative entrepreneur, we'll return the favor.

Today's top stories, conversation starters, and the back nine business bites.

spotlight on

People & Ideas

Whisky To-Go-Go

Now there's a company that let's you taste your knowledge of fine blended Scotches by mixing a whisky of your own. Read More