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Fallen Wall Street Titan Speaks
Chester Higgins Jr., The New York Times / Redux
A year after the death of Bear Stearns, former CEO Jimmy Cayne—still playing bridge!—talks to Charlie Gasparino about why he went down with his ship, where to invest now (gold?), and why other CEOs did a worse job.
It’s hard to believe that a year ago this week, one of the largest investment banks in the world, Bear Stearns, imploded. Its finances were so stretched by investments in soured real estate that the federal government arranged an emergency loan to prop up the company before it forced Bear’s shotgun sale to megabank JP Morgan a couple of days later. The move to “save” Bear Stearns by forcing its management to first accept a paltry $2 a share offer (later raised to $10) was considered at the time the mother-of-all stories during the financial crisis.
As someone who lost close to $1 billion, Cayne, like so many others, went from being among the richest people in the world to just ordinarily rich (friends say he still has between $50 million and $100 million).
As we know today, Bear’s implosion was merely a blip on the radar screen, a prelude to a much larger, much scarier story that is still unfolding, and may take years to fully comprehend. And yet, Bear, and its top executives, like former CEO Jimmy Cayne, still provide a bit of comic relief when they take their breaks from spending time at the country club—or in Cayne’s case, between hands of his favorite obsession, playing bridge—to speak their minds.
Last week, I got a taste of what Cayne was thinking. He referred to me as a “snake” in a new book about the fall of Bear, and called one of my former colleagues at the Wall Street Journal something that rhymes with “runt,” based on our coverage of the firm during its final, tumultuous months.
As someone who has known Cayne well for more than a decade, it was vintage Jimmy Cayne. While he was CEO at Bear, Cayne barely had a nice thing to say about anyone—including many of his own co-workers, like Bear President Warren Spector.
But Cayne could be particularly cruel when it came to his peers on Wall Street— everyone from former NYSE chairman Richard Grasso (“pigs always lose,” he once said of Grasso and his attempt to collect on a $140 million pay package, which he eventually held on to—oddly enough thanks to Cayne, who approved the package when he was an NYSE board member) to financier Ken Langone (whom he often referred to as a loudmouth) to former Goldman Sachs CEO and then-treasury secretary Hank Paulson, (in Cayne’s mind one of the most untrusting men on the planet) to one of the real gentlemen of Wall Street, Morgan Stanley CEO John Mack (who was simply “full of shit,” according to Jimmy).
So I reached out to Cayne again this week to hear from him personally if he actually made those remarks about me, because it certainly didn’t sound like the man I received an impromptu phone call from a few weeks earlier. Whether his call was early damage control—because he knew the book was coming out—or simply a chance to do what he liked to do when he was one of the most powerful men on Wall Street, I couldn’t say. Even more than managing Bear, understanding its trading positions and businesses, Cayne loved to schmooze. It should be noted that Cayne stopped talking to me in December 2007, when I broke a story that the board of Bear was beginning to look to have him replaced, signaling that the man who once controlled the firm with an iron fist was losing this control.
For Cayne it was the final straw. I had been hounding him for months—though I refused to report a Wall Street Journal story that he smoked pot (I never saw him high at work so it didn’t matter to me)—and I covered just about every problem the firm and Cayne was facing, from writedowns of losses and the federal inquiry into its imploded hedge funds to an “investigation” conducted by his country club into whether Cayne cheated on his golf scores. And while Cayne certainly complained to me over the years, he never cut me off, until then.
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Genni2002
For an article titled: "Fallen Wall Street Titan Speaks", you sure do talk about yourself a lot. And by the way, they all took "white-collar criminality to a whole new level". It may not be against the law? It sure was gambling and reckless and there should be a new category of criminal created for them.Ya, it's not soooo bad gambling with other people's money when you have the American taxpayer to cover your losses. Boo hoo hoo...what does one do with his ill gotten gains?
Lotto1
This is why CNBC is hated. An article that is nothing being pushed as "Fallen Wall Street Titan Speaks". This is nothing but an article about how popular Mr. Gasparino is and is that really important? Who cares if a newscaster is liked or not liked. Just imagine if CNBC had asked its reports to report real news rather than worring about if they were popular or not.
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n--Y--Portmanteauvankuyk
Charlie; I really tried to take this seriously, but boy, what a load of claptrap. The tradition of CNBC continues.
philmundo
Have to agree with the previous comments: Lots of B.S., very little substance. Do you get paid by the word? If not, you could have saved yourself a lot of trouble by just writing "Jimmy Cayne doesn't think he's such a bad guy--at least in comparison to Bernie Madoff. I spoke to him for around five minutes and am writing this puff piece in the hope that he'll take some time out from playing bridge to give me a real interview soon."
BTW...when did not being as bad as Bernie Madoff become any kind of reason to give someone a break? That's like finding a murderer and saying "well, he ain't no Charlie Manson, so I guess he's OK."
citivas
Agree with previous posters. This was an annoying non-story. 2 pages of 3 before you really get to an "interview" then absolutely, positively no actual information in the "interview." Charlie's reporting seems all over the board. He goes from one extreme to another from post to post and now this fluff peice...
blinky
Sorry Charlie, this piece is a time waster.
Embers
Who in their right mind would take investment advice from Jimmy Cayne?
JacksonBlues
Charlie Gasparino is an excellent reporter if your idea of excellence in journalism includes taking a single quote/rumor/shred of an idea and turning it into an overblown self-promotional piece that lacks any real value to understand an event. At least you don't have to hear or see him when you read this...
douggarr
As we say in the trade, not even a thumbsucker. Jimmy Cayne calls reporter for 2 minutes and reporter turns this into a story. You've been had, Tina!
sippewissett
Sorry, Coyne. I don't care if you went from being a billionaire to homeless. It's hard to invoke sympathy or empathy for an unrepentent blowhard like you. That you went down with the ship should make me admire you? Not happenin'.
EVERY CEO of EVERY firm on Wall Street should at a minimum be embarassed and (for some) at the maximum be prosecuted. ALL of the CEOs understood what they were doing internally -- gambling with shareholders' money. They weren't put on the job to do that. Let them refute that by showing where in their job descriptions it says that they could gamble and act omnipotently above the law.
Pupster
Ha! A crook interviewing a crook. Loved how Jon Stewart took Gasparino and his cronies at CNBC apart on the Daily Show the other night. Made all of you look like the fools that you are. Not a word coming out of your mouth now, including your insipid criticisms of Obama, have any credibility.
And Jimmy Cayne, so lamely in the shadow of the great Ace Greenberg. Never to achieve the same level of greatness, instead going down in infamy as swinging the golf club and smoking a doobie while Rome burned. Be grateful you're not indicted, Jimmy, and keep spending your unearned blood money. Your reputation you can't get back at any price.
winkingchef
omg r u srs?
did u work 4 the Wall Street Journal?
omg so je4lous!
Seriously man, could you take some initiative and wrtie some real investigative journalism instead of this fluff?
The fact that Cayne is the least crooked of the crooks really isn't that comforting to me.
Furthermore the fact that he didn't pull out his shares speaks either to the speed of the calamity at Bear or Cayne's stupidity - neither of which is very comforting since we are supposedly talking with one of the "experts" of Wall Street.
jackbutler5555
Relax folks, it's an interesting story. Is it supposed to be a PhD thesis? The folks here just don't like Gasparino and CNBC. Fine. Here's a tip: If you don't like reading Sir Charles, don't. Find a writer who will reinforce your existing opinions. It'll be kinder on your sphincter.
farmdow415
Gasparino is a what? He is not a journalist. He sound more like a fan of the subject than someone covering him. He couldn't have been more of a sycophant of Cayne. Tina, you can get first team folks to write for you, you don't need this guy.
Thank you.
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