12:10 Sure, it would've been worse to do it on 4/20 but Cinco de Mayo? Still pretty mean.
12:12 This thing is set to get underway in a few minutes. While we wait, I have a ton of items on the "wish-list" but beyond the obvious, I really, really want him to act like a stoned 17 year old who just got busted. "I know my rights, man." "I've read the constitution."
12:30: Alan Schwartz maintains that Bear was awash-- nay, drowning-- in liquidity days before it went down for the dirt nap.
12:32: Jim concedes, "in retrospect, in hindsight, leverage was a bit too high."
12:41: Angelides: Could you have done anything to prevent that weekend in March?
Cayne: Nothing. There was nothing that could have been done. We were taken down by hedge funds. Bear Stearns [and these words seriously just exited JC's mouth] "was a big fat goose walking down the lane that's about to be eaten up by competitors."
Angelides: You were in Detroit that weekend, right? At a bridge tournament?
Cayne: That's correct.
12:55 Schwartz: Equity was not the issue, man! Confidence was the issue!
12:58 Brooksley Born: Do you think maybe Bear Stearns was too big to manage? Maybe that's why it failed?
Schwartz: No, it was the rumors.
1:03: Jimbo: "I have no opinion about this too big to fail thing."
1:05: For C's sake, can we get to the important questions already? i.e. is J seeing more seeds in his weed these days now that he's a nobody?
1:10 Brooksley Born: What is this thing I've heard about "window-dressing" of the balance sheet at the end of the quarter? Can you explain that to me?
Schwartz: It was standard industry practice to make your balance sheet look better than it was. Basically.
Cayne: I don't like the term 'window-dressing.' That implies some sort of skullduggery, which was not going on.
BB: Oh, oh, I wasn't saying that, that's just something I've heard other people say. I didn't mean any disrespect to you Mr. Jim [batting of eye-lashes]
Cayne: I know you didn't, sugar tits.
BB: [Coy grin]
New rule: take a hit every time Schwartz or Cayne says 'rumors.'
1:23 Bill Thomas: Do you think it was unfair that the discount window wasn't opened until after Bear was sold?
Cayne: [Whose decision to go with the wake 'n bake this morning has resulted in a serious mellow] I don't know. That was their call.
(NB: This was Cayne's answer to that question one year ago: Asked about Geithner’s comments and his decision regarding opening the discount window to Wall Street after Bear had been sold for $2 a share and not earlier, Jimmy Cayne became spitting angry.
“The audacity of that p— in front of the American people announcing he was deciding whether or not a firm of this stature and this whatever was good enough to get a loan,” he said. “Like he was the determining factor, and it’s like a flea on his back, floating down underneath the Golden Gate Bridge, getting a h—o-, saying, ‘Raise the bridge.’ This guy thinks he’s got a big d–. He’s got nothing, except maybe a boyfriend. I’m not a good enemy. I’m a very bad enemy. But certain things really–that bothered me plenty. It’s just that for some clerk to make a decision based on what, your own personal feeling about whether or not they’re a good credit? Who the f– asked you? You’re not an elected officer. You’re a clerk. Believe me, you’re a clerk. I want to open up on this f—-r, that’s all I can tell you.”)
1:32 Though I'm digging Jim's extreme brevity ("I don't have an opinion," "No," "Ask Alan"), this is getting boring. While we wait for things to pick up, just going to throw this very much relevant question out there. So last night, I had some people over to get myself in the Jimmy Cayne Frame of Mind. It's decided that we should order milkshakes and I pull up a menu for the only place delivering at that time. Am I a cheapskate for thinking $10/shake is a ridiculous amount to charge for one normal-sized shake? I called over there to place our order and was like, "Did MenuPages get this wrong? Is it really $10/shake?" and fully expected the lady to be like, yeah, that's a typo or tell me you get ten shakes for it. We still got them of course but I still think this is an abomination and need to know if I'm off base here.
1:45 Peter Wallison: Mr. Cayne, what were these overwhelming "market forces" that caused Bear Stearns to bite the big one?
Cayne: Rumor, innuendo, I'm not going to use the word 'conspiracy,' but that was part of it.
2:05: Byron Georgiou, attempting to be a hero, brings up the fact that there's a book by William Cohan in which Uncle Jim "said some unfavorable things about Tim Geithner," and asks if JC remembers that. JC's smirk tells us that he obviously he does remember [saying that Geithner "thinks he has a big dick," claiming Geithner got an erection when he opened the discount window and implying that TG is a homosexual] but Cayne evades the question by saying he's never read the book and because this hearing is the biggest letdown OF ALL TIME, Georgiou doesn't read him the passage aloud and simply moves on. WHERE IS CLAIRE MCCASKILL WHEN WE NEED HER?
2:07 In case you were wondering, Jimmy doesn't read Rolling Stone either, so he can't answer any questions about Matt Taibbi, except to say that he heard about the horse semen and thought that was a pretty good prank. (This dialogue also begs the question, what does Jimmy Cayne read? Hustler, sure, but anything else?)
2:15 The ten minutes of JC and AS throwing the "rumors" "hedge funds" "shorts" "people wanted to take us down" "$20 puts" but refusing to name-check that firm in Chicago and that other one in Stamford like you know they're just dying to makes one wonder exactly what the managers of said firms promised Jimmy if he would keep his trap shut. Perhaps a ginormous bag of his favorite herbs? One so big and sweet that it caused fantasies like this? (The following is footage obtained from the Jimmy Brain Cam, which played on loop throughout the hearing):