Gallows humor, realtor greet Bear's stunned staff

NEW YORK (Reuters) - Shocked Bear Stearns BSC.N employees trudged into work Monday morning desperately seeking clarity on their futures.

The fact that the first person they met on entering their headquarters in midtown Manhattan was a salesman hawking cheaper apartments did little to lift their mood -- an ironic twist, perhaps, given that it was risky speculation in the housing market that got the bank into trouble in the first place.

"I've been at Bear for 11 years and I want to vomit," said a Bear Stearns employee, who described himself as a partner, as he entered the striking seven-year-old octagonal building two blocks from Grand Central Terminal.

To add insult to injury, someone had taped a $2 bill to the revolving glass doors at the 46th and Vanderbilt Avenue entrance -- some gallows humor on the bargain-basement $2-a share price JPMorgan Chase (JPM.N) paid for Bear Stearns.

"Where is the $2 bill?" joked one employee, "I might need that tomorrow!"

At the Madison Avenue entrance, Ray Schmitz, a Realtor with Coldwell Banker, was betting that with the value of their stock options in tatters, Bear's employees might soon be looking to trade their luxury homes for something a little easier on the budget.

"You have to go where the business is," Schmitz said as he handed out business cards. "A lot of these people are going to lose their jobs, and most of their wealth will have been in share options. They're soon going to be looking for a cheaper place to live."

FEAR

But generally, the mood was somber as employees arrived at work. The fear of job losses among bankers, traders and other staff comes as Wall Street grapples with a deepening credit crisis and the threat of recession in the United States grips financial institutions.

"It's an awful day, everyone is really upset," one employee said.

Street vendor Hassan El Ashkar, who sells coffee and bagels outside the bank's Manhattan headquarters, had his morning rush at 6 a.m., much earlier than usual.

"Of course I am worried," he said. "These are my customers. My customers came earlier than usual today, to see what's going on. They're all worried about their jobs."

Bear Stearns, roughly 30 percent-owned by its staff and proud of its above-average level of inside ownership, employs 14,000 people.

JPMorgan is paying just $2 a share for the 85-year-old Bear, valuing the fifth-biggest U.S. investment bank at $236 million -- just 1/15th of its market value on Friday and way below its record share price of more than $172 last year. ID:nN16640873 ID:nN16500718

The bailout punctuates an eight-month slide in Bear Stearns' fortunes as investors lost confidence in the smallest of the major securities houses and one known as an aggressive trader in credit and mortgage markets.

"It's going to be grim today. I don't know if I'll have a job at the end of today," said a Bear research assistant. "The price is crazy. Someone who'd won the lottery could have paid that price."

There was also anger and frustration at how the situation was handled. "I'm sad and I'm angry at my own senior management," said one employee.

NO PARACHUTES

To add insult to injury, Bear Stearns does not offer payouts, known as 'golden parachutes,' for executives in the event of it being taken over.

A Tokyo financial industry recruiter, who declined to be identified because of the sensitivity of the issue, said he knew firsthand of Bear Stearns employees looking to jump ship.

"We're already seeing people looking at moves from within that organization," he said.

Although the takeover means JPMorgan adds Bear's prime brokerage and asset management business to its franchise, it is likely to sell other parts of the business and many jobs could disappear.

In Asia, there was some relief that the bank had been rescued.

"It's not a bankruptcy, that's the good news, but JPMorgan is going to come out today and tell us what they think of us," the Singapore Bear Stearns employee said. "It's better to be out here in Asia than to be in New York."

In London, where Bear employs 1,500 staff in the financial district of Canary Wharf, some employees were less willing to speak, only confirming that they worked for the bank.

One Bear Stearns employee, when asked for a reaction snapped: "You must be joking. What are you, a vulture? Get a life."

(Additional reporting by Umesh Desai in Hong Kong, Mike Dolan in Tokyo and Olesya Dmitracova in London; Editing by Brian Moss)