Jimmy Cayne, an 87-year-old former bank manager of Bear Stearns, has died in Long Branch, New Jersey, after suffering a stroke.
He led the company as a senior for 22 years (including 15 as a senior) through his many successes – among them, as his first publicity champion in 1985, his great profit as a strong source in debt consolidation. and, finally, in the court of the elite Wall Street financial banks that included both Goldman Sachs and Morgan Stanley – as well as through his many serious mistakes.
His sales, his clever tactics, his sharp knuckles and the idea that he would often, if possible, sell a share of the Bear Stearns earned him $ 1bn, which made Cayne a great Wall Street executive to attend the event. through ownership of the assets of his company.
But Cayne also had some dangerous spots. When, in 1998, the US Federal Reserve, in fear of economic collapse, attempted to draft a hedge fund rescue plan that collapsed, Long Term Capital Management, Bear Stearns was the only major Wall Street company that did not participate like the Fed. pass the LTCM hat.
Failing to climb, Cayne asserted that as an LTCM discount bank, Bear Stearns had already lost enough money due to a strong hedge fund. His idea affected his Wall Street colleagues, including Henry Paulson, a former Goldman general.
There are still some who believe that Cayne’s coercion came back to bite the Bear Stearns ten years later. In March 2008, Paulson, then secretary-general of the US Treasury, refused to release the Bear Stearns in front of him, Ben Bernanke, chairman of the Fed, and Tim Geithner, president of the New York Fed, made a response that provided a breakthrough. savings bank in the hands of JPMorgan, slowly on what was needed, as a way to avoid depositing money.
Cayne’s other existing defects included another idea, in 2007, to have the Bear Stearns an all-night lender to two affiliated corporations that had invested heavily in mortgage repayments, just as some Wall Street banks stopped short-term production. , found credit for the cracks found in the market on these protections.
After the two hedge funds were removed in July 2007, the Bear Stearns seized the mortgage that had secured its debts, placing them on its existing pages. When the collateral price plummeted in 2007, Bear Stearns had to take on major sales records, which led to the first quarter of its collapse in its history and led to a loss of confidence in Cayne’s management.
The same bond was again poisoned three months later, in March 2008, when Bear’s lenders refused to give the company a short-term security allowance required on a daily basis. The company was forced to reserve money or agree to a fire sale for JPMorgan.
Cayne, who was one of the best players in the world on the bridge, hated losing and often did not communicate at the top bridge competition when he was supposed to oversee the company at Manhattan’s central city center in Bear. He smoked his beloved Cuban cigar almost continuously; they were like extra numbers.
He hurriedly fired Warren Spector, head of a major real estate business, in August 2007, because Spector had an opportunity to leave office immediately with Cayne last month, when they were both competing in an international competition. in Nashville, Tennessee. “I didn’t trust him anymore,” he said after Nashville, Cayne told me, and Spector decided to resell the $ 25m of the company’s headquarters to raise money for the failure.
Unfortunately, Spector went through a lot of information about the rental business in the company at a time when awareness was needed. Cayne failed to take action on the new Bear Stearns economy in the summer and fall of 2007 – he negotiated with Citic Securities, China – as the new headquarters rescued the company from its disaster.
James E Cayne, Maurice’s only son, a patent attorney, and his wife, Jean, were born on February 14, 1934. He grew up in Chicago, Evanston, Illinois, and went to Purdue University but failed to complete his studies because he refused to repeat. a French class that he failed. Her parents did not believe her and chased her out of the house.
“I do not want to read and study,” he once told me. “I hear and I hear.” He went through several missions – a stenographer for the US military in Japan; driver in Chicago; and as a leading supplier of photocopiers, in addition to machinery and scrap metal, a business owned by his first wife’s family; and then, when he got to Wall Street, of the town bonds. He aspired to be a writer.
But his real gift, along with blarney, was to play a bridge, a card game that used to be how a kid could be in front of Wall Street, if he had a load. And Jimmy Cayne had the goods.
In Purdue, where he must have been studying, he played bridge. Her first marriage ended in divorce. In 1961, he and a colleague won the Midwest Regional Bridge. He was 27 years old. In 1964, he moved to New York City to try to become a professional wrestler.
Playing the bridge led him to meet many Wall Street officials, including Lawrence Wien and Larry Tisch. In 1966, he won his first professional competition. He met his second wife, Patricia Denner, at a bridge race. He told me: “It was love at first sight. He is survived by Denner, his daughters Jennice and Alison, and seven grandchildren.
He got his first job at Bear Stearns, as a bond seller in town, thanks to his bridge skills. In 1969, Alan “Ace” Greenberg, who led Cayne as the company’s chief executive, became embittered with Cayne after learning that he was a world-class player.
How good was he? Greenberg is surprised. “If you study the bridge for the rest of your life, if you play with your best friends and achieve what you can, you will not play bridge if I play bridge,” Cayne told him. Greenberg hired him right away.
I spent many hours interviewing Cayne about what happened Card House, my 2009 book about the fall of the Bear Stearns, once asked him what it felt like to lose $ 1bn. In those days, such big losses were rare. After a deal with JPMorgan, due to its objections, it sold its shares of Bear Stearns for about $ 61m.
He also said he did not care about the money that was lost, boasting that he still had more than $ 400m, how much more money and smart compensation that Bear had paid him years ago.
“Only the people [who] the afflicted ones are the ones that will inherit my inheritance, and not me, ”he explained. “Because if you have $ 1.6bn and lose $ 1bn, you don’t look like a cripple, do you?
The author is the author ‘The House of Cards: The Story of Hubris and the Wretched Excess on Wall Street’ is founding friend @Pucknews