Bear Sterns Closes The Door On Its Specialists

Discussion in 'Trading' started by EdgeHunter, May 15, 2007.

  1. The next domino toppled today for floor-based specialists, as Bear Stearns announced it will write down the value of its specialist business, Bear Wagner, by $225 million. Firms all along Wall Street have been re-evaluating their specialist staff as the New York Stock Exchange has implemented its Hybrid market and shuttered one of its trading floors. Other firms to have slashed specialist numbers include UBS, Bank of America, Credit Suisse and Van der Moolen.

    "Obviously these are changing and challenging times for the specialist business," commented James E. Cayne, CEO of The Bear Stearns Companies Inc., in a release.

    <b>"The implementation of the NYSE hybrid system has dramatically reduced the opportunity of specialists to earn an appropriate return and has necessitated the write down of the intangible assets to accurately reflect the current value of the business.</b>

    "Bear Wagner has been supportive of the Exchange's implementation of its hybrid system but it is becoming painfully clear that the specialist system, and the value that it brings to the investing public with regard to trading transparency, committing capital and providing liquidity, is rapidly approaching the point where it is no longer a viable business model," lamented Peter Murphy, CEO of Bear Wagner, in the announcement.

    Bear Wagner represents more than 350 publicly traded listings. The division will be rolled into Bear Stearns' Global Equities business.;jsessionid=ZFI4RWNLYWA1QQSNDLRCKH0CJUNN2JVN


    Interesting post about response to the new Hybrid market from inside the beast...

  2. It is not just Bear. BofA, LaBranche, etc, etc, are all having enormous difficulties. LAB have been looking for a head of automated market making for a long time now (> 1.5 yr now), no takers. Same thing at say, CBOE, most of the DPMs (designate primary market makers) have gone out of business, their designations taken over by firms with capability to do automated MM, such as Citadel, Morgan, GS/SLK, Timber Hill, etc.

    I remember talking to Dom Gallo (those who know NYSE would know exactly who I am talking about) and a few NYSE floor guys around late '04, they were lamenting that all the floor brokers will be reduced to order filling clerks look at a computer price and eventually be phased out. They will still make maybe 80-100k a yr, a far cry from what they made during the height of late 90s.

    But hey, shed no tears for them. Those with NYSE seats are sitting on a 6-7M seat value. Decent retirement egg.
  3. as a non stocky guy could someone just explain in basic terms what is a specialist and the business they carry out please.
  4. rcj


    Save everybody time and energy and start by using the search function here. NYSE website also describes Spec duties.
  5. thanks for the tip.

    i wish i had though of that.

    you could suggest looking on the internet for everybodies request for information.

    i dont want to read an article of 15 pages of what they officially do i just want a one sentence reply that summarises what they do from someone who does know.
  6. AK100


    Steal money.