WSJ reporter Kelly talks about her Bear Stearns book

TALKING BIZ NEWS EXCLUSIVE

Wall Street Journal reporter Kate Kelly‘s book on the fall of Bear Stearns & Co., called “Street Fighters,” was released on Monday.

In the book, Kelly describes the behind-the-scenes negotiations that occurred by Bear, the federal government and bidders for the company that ended up with it being sold to J.P. Morgan.

Prior to joining The Journal in January 2001, Kelly was a writer and reporter for Time magazine, where she covered business, society news and politics, including the presidential vote re-count. She also worked as a reporter for the New York Observer from 1997 to 2000.

In February 2004, the American Society of Newspaper Editors named Kelly, along with fellow Journal reporters Ianthe Jeanne Dugan and Susanne Craig, finalists for the Jesse Laventhol Prize for deadline news reporting by a team. In October 2003, she and fellow Journal reporter Craig jointly received an award from the Medill School of Journalism at Northwestern University for spot news coverage of the New York Stock Exchange.

Kelly talked by e-mail with Talking Biz News about writing the Bear Stearns book and her reporting behind the book. What follows is an edited transcript of that conversation.

1. How long have you been covering Bear Stearns and investment banks?

I moved back to New York from Los Angeles, where I’d been covering the business of entertainment, early in 2007, and became a Wall Street reporter then. My beat companies were Bear Stearns, Goldman Sachs, and Lehman Brothers. That assignment changed over time –- I subbed Lehman for Morgan Stanley about a year later –- but I stuck with Bear until they went down in the spring of 2008, covering the aftermath of the sale to J.P. Morgan until I went on book leave over the summer.

2. How soon after the failure of Bear Stearns did you decide that it was book material?

I put together a three-part series for the Wall Street Journal on what really happened behind the scenes at Bear during the weeks before its demise, the week of its demise, and in the week or two that followed. It was a nearly 10,000 word story in total. After that, I got a call from Adrian Zackheim at Portfolio, my publisher, and we were off to the races from there. So it was about three months after the fall of Bear itself, and just days after my Journal series ran in late May.

3. Did you already have an agent? How did you sell the idea?

The whole thing was Adrian’s idea, so I got lucky: I didn’t have to write a proposal. I didn’t have an agent, but I had a wonderful lawyer named Bob Barnett, whom I’ve known for many years.

4. Once you started writing the book, how long did it take?

Seven months, start to finish, was the amount of time I spent on the project. Actual writing? Hard to say. I had all good intentions of beginning to write on Nov. 1, and that was when I had an April 1 deadline, so I was figuring on six months to write. The manuscript deadline got moved to February, and the reporting wasn’t finished in early November, so I got squeezed on both ends. Ultimately, I had to write as I went along.

5. What were the biggest hurdles in the reporting and writing process?

Convincing reluctant sources to speak to you is always the hardest part. They’re worried about a host of issues, including how they’ll appear in the piece and whether their employer will frown on their involvement. I try to tackle that with a lot of honesty -– telling them I can’t guarantee a positive or negative spin, but that their viewpoint will always enhance the accuracy and fairness of the writing –- and a little charm. In many cases, it worked. Not all.

The writing was tough because the book was so long -– 10 times as long as the longest newspaper story I’ve ever written. I tried to tackle it little by little. A writer friend gave me some good advice: even on day one, try to write small chunks as you go. If you come back from a meaty interview and there’s a scene that the subject has sketched out for you, jot it down in rough form. That way, you don’t have to sit down after three, four months of work and be staring at a blank screen, which would be very intimidating. You can always do additional reporting later, and it might even be enhanced by the fact that you have a draft of the scene already, and you know exactly what gaps still need to be filled.

6. You wrote some pretty well-known stories in 2007 about Bear CEO Jimmy Cayne. Did that open or close doors during the book reporting process? How so?

I would say it opened doors. Any time you have a high-impact story, people notice it, and they take your work more seriously.

7. In some instances in the book, you refer to stories you wrote for the Journal. Why include yourself in the story?

Any time where something I wrote seemed to have an impact at Bear –- in other words, employees were reading the coverage, discussing it among themselves, and in some cases, reacting to information divulged in the pieces -– it became relevant to the broader story that I was telling. My Portfolio editor and I had a discussion about whether I should talk about myself in the first person, and we ultimately decided that I shouldn’t. It was just too weird to insert myself in to the book in that way. So I used the third person and referred the reader to notes that referenced the Journal stories in question.

8. One of your writing strategies was to create mini-profiles of the main characters. How much reporting did that take about their personal lives -– their families, their homes, their personal habits?

A lot. Any time you can talk about a person’s home town, what their mom and dad did for a living, or what their interests were in school, I think it helps bring that character to life. I spent some time in Binghamton, N.Y., where Bear CFO Sam Molinaro was from, and looked at Jimmy Cayne’s old yearbook from Purdue University. Those sorts of touchstones help create the characters. Knowing about their personal habits is key. Hearing that somebody is a rock-and-roll aficionado who collects signed guitars and hangs them in his office on Wall Street tells you something. So does hearing that somebody couldn’t sleep at night for months because they were so worried about Bear, and that they passed the time by surfing YouTube and watching old movies while their wife and kids slept. Those are both examples from my book.

9. What was your personal motivation for writing this book?

I had always wanted to write a book, and when Portfolio came along with this opportunity, it seemed too good to turn down. I already knew the basic details of the story, and I was confident I could take it to another level with a book. Hopefully, I’ve succeeded. It was a very tough professional challenge, especially with the tight time frame, but I pulled it off!