Bear Stearns is gone, and now so is the portrait of fallen chief executive and company chairman Jimmy Cayne by Geoffrey Raymond, the artist who has painted Eiliot Spitzer, Jim Cramer (twice), Lloyd Blankfein and Dick Grasso. It was sold to the wife of a former Bear Stearns employee. She paid $12,000.

If you walk by Bear Stearns Madison Avenue headquarters tomorrow, you might catch a glimpse of former chief executive Jimmy Cayne on the street.

Unfortunately, we're not privy to Cayne's personal schedule. Rather, we know that Geoffrey Raymond, Wall Street's most important artist, will be displaying his latest masterpiece, a portrait of Cayne, outside the headquarters at 383 Madison. He'll be asking people passing by to annotate the painting with their thoughts about Bear Stearns and its former leadership.

In the past, Raymond has created similar portraits of Lloyd Blankfein, James Cramer (twice), Eliot Spitzer and Erin Burnett. He first came to DealBreaker's attention when he appeared outside of the New York Stock Exchange with a portrait of former NYSE head Dick Grasso.

Earlier: Our previous commentary on Raymond's paintings.
Elsewhere: Raymond's personal website, The Year of Magical Painting.

The people familiar with the matter have spoken once more, which can only mean one thing: another Wall Street chief is headed for the executioners block. The Wall Street Journal's Kate Kelly is reporting that Jimmy Cayne has started notifying to board Bear Stearns that he plans to give up the CEO desk while remaining chairman. Alan Schwartz is expected take over.

More tomorrow morning.

Bear CEO Expected to Step Down But Remain in Chairman Post [Wall Street Journal]

"It's unbelievable. The phones are ringing off the hook, and everyone wants to play golf with me now."

That's what Bear Stearns chief executive James Cayne told CNBC's Charlie Gasparino about the fallout from today's story about his adventures with the golf and the cards and the pot.

Also, now we know why executives need private planes. How else you going to score at a bridge tournament? Can't exactly bring your twos with you on a commercial flight. Not even in first class.

Your company’s in trouble and you need to relax. You’ve tried taking every other day of the week off from work to play in golf and bridge tournaments, but that’s not doing the trick because, as it turns out, you’re almost as bad at those things as you are at not losing money, and you routinely turn in unimpressive scores on the green and sometimes place close to dead last at the card table. Skipping out on conference calls two minutes after they’ve started isn’t helping you to unwind (which is surprising, because you were leaving for your three hour deep tissue massage/nap combo, and those usually do the trick), and neither is playing dead. What’s a CEO to do? If you’re Jimmy Cayne, the answer is simple—get high. Get really, really high.

Yes, according to today’s Journal, James Cayne is a pothead, and may even be stoned right now (you would be, too, if you’d recently been outed in a Page One article for being friends with Maury Povich). It’s apparently common practice for Cayne to light up at the end of the day during bridge tournaments, and the old boy once hotboxed a men’s room at a Doubletree hotel in Memphis with “a woman.” He denies the story, though telling, so very tellingly, Cayne told Journal reporter Kate Kelly that he would only respond “to a specific allegation” and not general questions regarding the fact that he loves weed. That the very next thing he did was fish an empty Fresca can out of the recycling bin and ask Kelly if she had “anything sharp enough to poke a hole” is also suspect.

What else did we learn about Cayne today that we didn’t already know? He fancies himself more important than the leader of the free world, refusing to meet with the President about economic issues unless Bushie comes to 383 Madison Avenue (a visit GWB has yet to make, probably because he’s scared the temptations surrounding him in the office of a drug addict will be too much for him to handle). He’s dying to use the term “Mick” (in July, Cayne told mortgage-division head Tom Marano to “keep [his] Irish down”). And perhaps most telling, this: Cayne can no longer enjoy the singular bliss that is lighting up and enjoying a bowl of Count Chocula, because a few years ago, he was diagnosed with a breakfast-cereal allergy, an affliction which he spoke at length about on July 12. And this would probably explain why he has a tendency to act like an unmitigated prick, a trait illustrated by the fact that Cayne regularly schedules time not to work, per se, but to tell employees the various ways in which their children suck (once informing investment chief Alexandra Lebethal that her 11 year-old son had a “rotten handshake” and will be going “nowhere in life” and sending an email to Alan Schwartz that said, “I bet your kids are going to grow up to be just like me”).

Bear CEO's Handling Of Crisis Raises Issues [WSJ]

“I feel great,” Bear Stearns chief executive James Cayne tells London Thomas of the New York Times.

But it wasn’t clear the editors at the Times are entirely persuaded. They headlined the story with a metaphor that seemed to hint that Cayne might not be at full strength. “Ailing Firm Gets Tonic From China,” the headline proclaims. Thomas uses similar language in the article to describe the firm’s condition and mentions that Cayne recently spent several days in the hospital.

Charlie Gasparino, who first broke the story of Cayne’s hospitalization, is now reporting that his condition was more serious than indicated in earlier reports. At the time, it was reported that Cayne was hospitalized for a urinary tract infection. On CNBC’s Fast Money tonight, however, Gasparino reported that Cayne was hospitalized instead for a prostate infection. Acute prostate infections are usually treatable with antibiotics but sometimes require a hospital stay. Severe cases can be fatal. It is not related to more serious conditions such as prostate cancer.

Would you rather have a CEO who’s become a joke only recently (let’s say June) or one who’s been a joke since day one? A CEO who’s going to kick it any day now or one who’s probably got a few good years left? A CEO who comes into the office or one who works from the green? A CEO with his own ballpark (in association with a certain 88-win team) or one with none? A CEO who’s built something or a CEO who’s danced? A CEO who holds a gun to his board’s collective head to encourage them to nod in agreement when he says stuff like “everything’s going as planned” on conference calls or a CEO who walks out of conference calls two minutes after they’ve begun? A CEO who commissioned an employee to blog about his failures or a CEO who just yesterday stopped a suspicious looking secretary in the hallway and said “If you tell anyone about this, I’ll fucking kill you”? A CEO with white hair or a CEO with black hair with streaks of white? A CEO who’s cut out meat from Bobby Van’s for both “health reasons” and out of respect for animals or a CEO kills a calf every morning “to start the day on a high note”? A CEO who’s fired one or two people so as to cover his own ass or a CEO who’s gotten rid of at least 1,000 (think mysteriously disappearing first-years who were asking too many questions about maintaining positive operating leverage)? In other words:

It’s always sad when veteran employees with spouses/children/golf club memberships to pay for* are shown the door for no good reason (other than the market being in the toilet), but what of the neophytes, who haven’t even been around long enough to have their spirits and wills to live crushed? We’re told that eighty salespeople from Goldman’s Class of 2007, hired just two months ago, were notified yesterday that the firm is “reevaluating” their (collective) role.

The disposables were then given the option of being transferred into operations now or biding their time for the next three months waiting for an as-yet-undecided fate, which could very well include being “let go.” If this is the kind of crap deal being offered to the Mini-Masters of the Universe, what do you think is being proffered to the youth of, say, Bear Stearns?

*By which we do not at all mean to imply James Cayne should be laid off. You came to that conclusion on your own, don't put that on us.

We noted the other day that immediately after he fired Warren Spector, James Cayne shot a golf personal best, probably because stripping someone of his livelihood is a good way to tighten your wrist cock and improve the explosion through your hips. (I shot a 30 after firing Bressler). Today DealBook compares Bear Stearns’s closing stock price between June 14 and August 9 and Big Jim’s golf score. A 35 percent correlation between BSC’s price and Cayne’s score reveals that when Bear is down—which is most of the time—Cayne's game is down, too, by which we mean up, because that’s how golf is tallied, and if you don’t know that, you shouldn’t be reading this site.

Now, by personal best, we mean 88, which is not good at all, unless it’s amateur hour. The Bear Stearns press office, staffed—out of necessity—by con artists, came up with an excuse that would no doubt please shareholders worried that he was spending too much time away from the office: “[Mr. Cayne] regularly plans an evening round after work on Thursdays and again on Fridays,” and the reluctant CEO: “Why, you think he should spend more time on the green?”

The Bear Stearns Golf Index [DealBook]

We’re in the middle of an GLOBAL FINANCIAL MELTDOWN! (Carney's caps, emphasis, punctuation). Everyone’s panicking, running for their lives and spreading rumors. Many of the rumors aren't true but enough of them have turned out to be close enough for horseshoes, hand-grenades and volatility traders.

The latest one is that Bear Stearns CEO Jimmy Cayne has either been fired or resigned. While some have already called for Cayne's head after recent trouble of Bear Stears, and—if it one of those “we’re going to have to ask you to leave the bar, sir”-type situations—perhaps even a blessing in disguise for a guy who just wants to relax and play some golf in his last days on earth, we’re inclined to believe the old boy’s going to buried in the building. And, of course, that he remains as CEO.

Senior MD of Investor Relations, Elizabeth Ventura, told Dealbreaker, “These types of rumors are irresponsible and have no basis in fact.” And prior to being put through to Ms. Ventura, we were told by a Bear Stearns operator, “We haven’t heard anything on the switchboard.”

First he goes from being really bad at golf (for someone who leaves the office every day at noon to play, after coming in late) to just being bad at golf, and now we’ve learned that while there are many Bear shareholders voming over the side of the George Washington Bridge (we’re going out on a limb and assuming that most BS stockholders are from New Jersey), James Cayne isn’t one of them. Why? He doesn’t own that much of the company. Alan Greenberg, Sam Molinaro, Warren Spector, and James Cayne were among the few investors who took (a good amount of) their money and ran, just before the anvil of a stock crashed to $117.78 from $172 on high. Between the four Bear higher-ups (sorry: 3 Bear higher-ups and one guy who’s unemployed, coincidentally, the working title of my forthcoming sitcom on CBS), they cashed out in excess of $57 million in company stock before things got ugly. What the investors saved—nearly $16 million—in well-timed sales, they passed on to a bunch of sad sacks lacking luck, who one hopes didn’t also have their money in the “no value” or “little value” hedge funds.

Oh, and this guy wants him to be fired. So:

His golf business, that is. You didn’t think we meant Bear Stearns, did you? Come now. Deck chairs on the titanic (sandbags in New Orleans). The day after Cayne fired Warren Spector, co-president and heir to a kingdom only a sadomasochistic prince would want to inherit, Papa Bear shot one of his best games ever, at the Hollywood Golf Club. Granted, a score of 88 is only respectable if you’re a complete amateur, but it was a proud moment for the 73-year old championship cigar smoker, who in the week’s previous, was clocking in at around 102. And that was when he was (allegedly) cheating. Will Spector’s canning do anything to improve Cayne’s in-le-toilette bridge game? Stay tuned.

Cayne's Double Bogey [NYP]

Last, week, when Bear Stearns seized the assets of its own hedge funds, some people scoffed. It seemed a little unjust that while investors had been told there was a grand total of zero dollars (or zero-ish dollars, depending on whether or not they put their money in the gigantically failing fund or the essentially gigantically failing fund) available for them, B.S. managed to wring out some value for itself.

For those feeling bitter, today we offer some vindication: on the same day the bank was seeing just how long it could ride the Screw our Investors Express, CEO James Cayne—CHAMPIONSHIP BRIDGE PLAYER AND CIGAR SMOKER JAMES CAYNE, whose “ascent has been a result of a [bridge] player’s guile”—was getting his ass handed to him at the card table. Mr. Cayne, the No. 2 seed in the American Contract Bridge League’s Summer North American Bridge Championships in Nashville, Tennesse, lost to the No. 15 seed. The score was 119 imps to 93. Cayne was presumably not cheating at the time.

A First-Time Winner in Bridge Event [NYT]

Investors in Bear Stearns’s ‘We’ve basically got nothing’ and ‘We’ve got a nickel’ hedge funds (the High-Grade Structured Credit Strategies Enhanced Leverage Fund and the High-Grade Structured Credit Strategies Fund, respectively), taking issue with the lack of value, are exploring legal action. Ross Intelisano, of Rich & Intelisano, whose services have been retained by two investors in the funds said that his clients are “shocked and angered by the losses” and “were under the impression that at least for the fund [that they were invested in] that the losses were much milder," which was probably because up until Tuesday, Bear Stearns was pretending the funds still had value.

Bear Stearns declined to comment on the possible litigation, so here’s an imagined conversation from 383 Madison Avenue.

Richard Marin: Uh, Mr. Cayne, they’re threatening legal action.

James Cayne: Wah? My half-hearted, barely sincere, too little, too late apology wasn’t good enough?

Richard Marin: Apparently not.

James Cayne: Fuck it. Let’s go golfing.

Richard Marin: Okay, but no cheating this time.

James Cayne: You can trust me, Dick.

Angered Bear fund investors eye legal action [CNN Money]

A few weeks ago we reported on the anti-golf sentiments of Carl Icahn and Hank Greenberg. For both men, golf seems to signal a kind of vice for executives. Someone who is really dedicated to their job shouldn’t have time for America’s most popular pasttime, both men said at the Wall Street Journal’s Deals and Dealmakers conference.

We wonder what they’d say in a candid moment about Bear Stearns chief executive Jimmy Cayne’s golfing. Yesterday New York Times reporter Patrick McGeehan revealed that at ciritical moments during Bear Stearns hedge fund crisis last month, Cayne again and again hit the links.

On June 14, the day when Bear Stearns reported a 10 percent drop in its operating earnings for the second quarter, Mr. Cayne played a round and shot a 96, his scores on the online database, GHIN.com, indicate. The next day, a Friday, he played again.

On Thursday, June 21, as several big banks pressured Bear Stearns to increase the collateral on loans they had made to its sinking fund, Mr. Cayne was back on the course. That day, he shot a 98.

The next day, in the biggest rescue of a hedge fund in almost a decade, Bear Stearns pledged to put up $3.2 billion to bail out its fund. (It later said that $1.6 billion would suffice.) Then the remarkably consistent Mr. Cayne played golf, shooting a 97.

No doubt the short item in the times will rankle some investors in the two troubled hedge funds, and perhaps Bear Stearns shareholders, who are inclined to read the story as demonstrating that Cayne is an out-of-touch executive. Brad Bissonnette at BloggingStocks has already sounded the expectedly annoyed note.

“Immersing yourself in a hobby, such as gardening or golf, can often be an excellent way to relieve stress and work-related anxiety,” Bissonnette writes. “But if you're a shareholder of Bear Stearns who has just witnessed the collapse of a hedge fund requiring that the company put up $1.6 billion to bail it out, you might prefer that the CEO would spend some extra time at the office.”

But the story also seems to be calling up the opposite reaction from some. For them it seems that the tale of Cayne golfing has had a humanizing effect, painting the executive as a normal person who ends the week the way many American men do. “Is it possible to help manage through a crisis and still get eighteen holes in after five p.m.? I don't think McGeehan wanted to know--it could have spoiled his clever story,” John Caddell writes on his blog. “I'm rooting for Cayne here. Maybe he's more than a big-shot prima donna who lands his helicopter on the practice range. Maybe he's figured out a way to get some balance in his life.”

Perhaps the most interesting response came from Tom Kirkendell of Houston’s Real Clear Thinkers who wonders if maybe everyone involved shouldn’t be grateful that Cayne was playing golf instead of managing the hedge fund situation from his desk at Bear. “Cayne's handicap index is 15.9, so his scores during that stressful time certainly ballooned a bit higher than normal. But think how bad this could have gotten for Bear Stearns if Cayne had not been able to get his golf therapy,” says Kirkendell.
Meltdown Didn’t Hurt His Golf Game [New York Times]