Bear Stearns was once one of the elite prime brokers. But competition from players big and small seem to be eroding its status. A Tabb Group analyst tells the AP that Bear Stearns "has missed out on the recent growth in the hedge fund industry." Ouch! Couldn't have come at a worse time. Hedge funds seem to be opting for more than just one prime brokers, which has worked against Bear Stearns and in favor of Morgan Stanley or Goldman. Bear's pretax profit in clearing actually fell almost 10 percent last quarter. It says it is upgrading its international services, but the skeptics are far from convinced that it will make a huge difference. Meanwhile, the likes of Citigroup, UBS and Deutsche Bank are ramping up their services. There has been a revolving door at the top. A recent legal ruling may also be hurting. The next hire will have an amazing opportunity to rebuild.

For more:
- here's the AP article