We thought it was impossible at this point to dig up any more evidence to support the claim that Jimmy Cayne is a dick who cared more about his recreational activities (card playing, drug use, journalism) than the company he was supposed to be running, but, damn it, it’s been done. And in the same NYT article, another notion we once held regarding Wall Street—that it’s the type of place that kicks you out on your ass long before the dementia sets in—is also blown out of the water.
It’s not surprising in the least that J-Cay would be the type of person to refuse to refer to an elder by the nickname he so obviously loved. Still, the extent to which JC went to deny Alan “Ace” Greenberg one of the last remaining pleasures in the twilight of his life is stunning. According to Landon Thomas, Cayne “makes a point” to “never” use the handle, and has “a standing order among some of his closer associates that anyone who uses the name Ace in his presence, owes him $100.” Due to the fact that virtually no one else at the firm shared Cayne’s inability to utter the one syllable proper noun, this is actually considered to be one of the J man’s most prudent business decisions.
Also in line with what we know but still beating his own record at prickish behavior is the story about how Cayne “convinced” Greenberg to stay at Bear last year, after he threatened to leave, citing a lack of respect, mostly from the big guy himself. The board, trying to stave off a PR crisis, told JC to get in there and make nice. Obviously any ounce of sincerity was out of the question, but they were probably under the impression Cayne could at least fake some stuff about Greenberg being “so important to the firm,” “a valuable part of the team,” “a living antique we don’t want to lose,” and so on and so forth. As it turns out, not so much!
Apparently all Cayne was capable of was citing some speech he’d given at a dinner that mentioned Greenberg’s previous work, before getting pissed off that a man of his stature had even been asked to do something so demeaning, and shouting “Alan, this is the opposite of disrespect, so don't tell me you are disrespected” and walking out of the room. In Cayne’s defense, he did have the respect not to put Greenberg in a choke hold and ask, “Why don’t you just die, old man?” which you know he wanted to, but still. Way to make the guy feel wanted. (Another thing to note, for fairness sake, is that the reason Cayne had to cut things short was because he was late to play golf, and not because he didn’t “give a baker’s fuck if He Whose Nickname I Shall Not Say stuck around or not.”)
Shockingly left out of the article is the rumor we’ve heard that when Cayne found out those early negotiations between JPMorgan and the Fed had resulted in the Fed, feeling the equity investors didn’t deserve jack, coming up with the $2/share deal, JC was so insulted that he said he’d rather see Bear go to zero than take two, and threatened to take adequate steps to ensure that end. (Cayne scrapped the idea when the Fed supposedly told him they spend the next twenty years investigating every move he ever made at the firm which, I think we can all agree, would’ve been awesome, and would clearly include proof that JC gave away 1,000 shares of BSC to make the pictures of him taping the two-dolllar bill to the door of 383 Madison go away.)
Oh, and “Ace” says that one of the reasons he wanted to leave, in addition to being disrespected, was a bout of depression stemming from his puppy not placing well in dog shows. Enjoy it while you can, Jamie Dimon.
Behind Bear Stearns' demise, a royal battle at the top [IHT]
Posted by guest , May 07, 2008 4:29PM
Dog gone.
Posted by guest , May 07, 2008 4:32PM
Damn, he was depressed and his dog was sick, and then he had to deal with Jimmy Cayne destroying his life's work?
My heart goes out to the man.
Posted by Capt Obvious , May 07, 2008 4:37PM
that article was amazing (the NYT piece I mean) - how those two old farts maintained any sort of decision making capacity at BSC is beyond me - both should have been put out to pasture a decade ago
Posted by blndebnker , May 07, 2008 4:42PM
Thank God Bess. I was wondering when you were going to post something about this. You forgot to mention how Ace snarkily remarked "that's a shame" or something like that when asked about JC losing $900mm. Priceless.
Posted by guest , May 07, 2008 4:47PM
@ Capt Obvious - I disagree. Cayne sucked ass and never should have been put in charge but Greenberg built the Bear culture of "eat what you kill" within a risk management atmosphere. He never would have let this happen - mainly due to Bear being his life. Cayne deserves everything he got but its unfortunate that Greenberg had to watch his creation implode.
Posted by guest , May 07, 2008 4:53PM
Nice commentary, Bess. It's hard to do justice to the article because it's just so chockful of insanity. Mr. Greenberg thought he was destroying Jimmy Cayne's reputation -- actually he was destroying his own as well, or at least demonstrating he was a little more than past his prime. I thought your closing comment was great: "Enjoy it while you can, Jamie."
Posted by guest , May 07, 2008 5:00PM
I worked at an insurance company in nyc where the top guy was well into his 80's and had to hang on to someone's arm to get around. Many of the directors came to their meetings in wheelchairs assisted by nurses. Some places just run themselves--into the ground.
Posted by guest , May 07, 2008 5:02PM
I agree, I think its a bit ridiculous that Ace walked away scott free on all of this. This coming from one of the biggest Jimmy Cayne haters out there, I have alot of friends who are jobless cause of this idiot. I do however love the fact that Ace charged him 77K in commish for trading his BSC shares, that was the highlight of the article.
Posted by guest , May 07, 2008 5:06PM
Oh my god, I thought Elmer Fudd
was a fictional character!
http://looneytunes.warnerbros.co.uk/stars_of_the_show/elmer_fudd/elmer_story.html
Posted by guest , May 07, 2008 5:10PM
Jamie Dimon had this stuff 24/7 at Citi that is why he left.
Posted by Capt Obvious , May 07, 2008 5:13PM
@4:47 - respect your opinion, but per the article, Ace was the chairman of Bear's risk and executive management committee.. he doesn't get a pass here .. the success he achieved through the culture he fostered does not absolve him of some responsibility when said culture cannibalizes itself .... esp. when he chaired the group that was supposedly applying checks and balances .. regardless if the title was ceremonial
Posted by guest , May 07, 2008 5:16PM
Jimmy cayne will always be remembered as the man who destroyed Bear Stearns
Posted by guest , May 07, 2008 5:17PM
Andrew Ross Sorkin is furious that he didn't get the scoop on this one.
Posted by guest , May 07, 2008 5:27PM
This is the Rashomon version tale on the BSC death.Two old warriors are obviously in shock and trying best to cope with the implosion of their identities, and what can we expect them to say that will make any sense right now? Ace is acting like a trader, trying to cut his losses and move on, but how the hell can he? A normal guy would go find some quiet spot in Litchfield co. and do some serious grieving for his lost company.Instead he's back in the game with his best shit eating grin on, and when not counting up stock commissions, is talking like Sgt. Schultz.His family should take him to a doctor and have him checked out for PTSD.
When the world thought of BSC, it thought of Ace.He was the firm.It must have boiled Cayne's balls to have old yoda around like a spectre to haunt and torment him,but for all Cayne's fault's, BSC was never more profitable until a black swan perfect storm turned it all to dust.
Posted by guest , May 07, 2008 5:36PM
I wouldn't really call, among other things, putting "Roger Ebert" in charge of their mortgage hedge funds a black swan event
Posted by guest , May 07, 2008 5:37PM
Is Andrew Ross Sorkin a running back?
Posted by guest , May 07, 2008 9:01PM
I think the "black swan perfect storm" (first time I heard those two metaphors used together) might have spared Bear Stearns had it not been excessively leveraged.
No one at the top seemed to notice this simple fact and its implications for the firm.
Posted by guest , May 07, 2008 9:32PM
They might have known they were, but how could get stay ahead of that tsunami? They did de-lever the balance sheet, but they didn't keep cash balances on hand that would have been comparable to their peers.They really needed to dilute the equity in a big way, and would Jimmy C have agreed to that?
Posted by guest , May 07, 2008 10:04PM
Wow, Cayne, there is a fiduciary duty not to push shares to 0. That takes some balls.
Posted by guest , May 08, 2008 1:52AM
@5:10pm. Jamie Dimon didn't quit Citigroup because he was fed up with stupid internecine intrigue among superannuated egoists. He was fired by Sandy Weill for the simple reason of refusing to promote Weill's daughter. I especially like the fact that Dimon had known the Weill crew much of his life up to that point.
I don't think Ace Greenberg's decision to go ballistic on Jimmy Cayne in the pages of the New York Times was terribly wise. Greenberg's behavior has got to be raising questions at JP Morgan about how easy he is going to be to take as a daily presence, how much anyone can reasonably trust his discretion, and just what good he is going to do for them in terms of public relations.
If Jamie Dimon has the nerve to refuse to promote his mentor and boss's daughter, he's got the nerve to find a quick exit for an 80 year old man that made a big public mistake in judgment.