We'll say this for Mr. Cayne: He clearly shares his primo stuff with the research department.
In March, shortly after No. 2 U.S. subprime lender New Century Financial announces a major earnings restatement as a result of failing loans, Bear Stearns analysts Scott Coren and Michael Nannizzi write a research note on New Century. They argue that despite New Century's stock having plunged 50%, to $15 per share, its downside risk is no worse than $10 in a "rescue-sale scenario." Within a month, New Century drops below $1 a share, is suspended by the NYSE, and files for Chapter 11 bankruptcy protection. 
Last updated January 16 2008: 5:51 PM ET
