Bear's Cayne Takes $900 Million Loss, Seeks Answers in Religion

One big Bear Stearns (BSC) shareholder is no longer hallucinating about a higher JP Morgan (JPM) bid for the firm: Chairman Jimmy Cayne, a Wall Street and Bear Stearns legend and one of the few men most responsible for Bear's collapse (the others being CEO Alan Schwartz and the firm's financial and risk-management teams), has taken his loss.

The NYT's Landon Thomas Jr. has the story:

Only a year ago James E. Cayne's stake in Bear Stearns was worth more than $1 billion. But on Thursday, Mr. Cayne, the chairman of Bear, disclosed that he had sold all of his shares in the troubled investment bank this week for just $61 million.

While the sale leaves Mr. Cayne a wealthy man, it nonetheless underscores the deep losses suffered by Bear's shareholders after the company's forced sale to JPMorgan Chase two weeks ago.

And for Mr. Cayne, the liquidation evokes a deep sense of loss. It represents a humiliating capitulation for a brash executive who, with his ever-present cigar, suspender-snapping ways and Friday golf outings in the summer, epitomized the classic, if outdated, picture of the Wall Street chieftain.

Landon also paints a picture of how a 74-year old legend who spent all of his working days since 1969 at Bear is dealing with the fact that, in the space of 72 hours, 90% of it went "poof":

People who have spoken with Mr. Cayne say that he, like everyone at Bear, was stunned by the firm's precipitous collapse and the rock-bottom price of its sale. In the past weeks, together with his wife, Patricia Cayne, who is a student of Jewish religious traditions, Mr. Cayne has spent considerable time searching for comparable events in religious history to see what lessons can be learned from the collapse of his firm, said a person who has spoken to him recently.

Hats off to Jimmy: If I were in his shoes, I'd probably turn to something a good deal stronger than religion. And there's also a silver lining. If Jimmy does manage to find "comparable events in religious history" that shed light on Bear's demise, he will be able to contemplate them from his new $26 million apartment in the Plaza.

More on Bear Stearns: Did Bear CEO Alan Schwartz Lie About the Firm's Condition on CNBC?

Comments

[northof55]

Cayne should be prosecuted for treason like all the other Wall Streeters that have strip mined the assets out of the US. There is billions of dollars a year going into 401Ks, simple IRAs etc. Bear Stearns, hedge funds etc, use "financial instruments" to strip assets from pension funds. You get 10% if your lucky, unless it is destroyed, yet hedge fund mangers pull down hundreds of millions. They have found ways of stripping the moneys out of pension funds. The new rush is to commodities. Calpers is sticking millions into commodities right know afraid they will lose on the gold rush. Hedgers are now betting the other direction.

If everyone pulled their money from pension funds and put it local banks, took a lesser rate of return, this country would boom. Local banks could deploy it locally, instead of Wall Street using the money to force companies overseas for higher returns.

Pension funds work basically like federal income taxes, they take the money in and deploy it the way they want. Bush to his cronies, Wall Street to funds managers and CEOs.

Want to stop wall street, stop sending them money.

[mbaty]

He had to sell his shares for "just 61 million." Jeez, it's like a travesty, like totally, that sucks dude. Let's hope he can pick himself up and keep going. When life hands you lemons, right?

[mommadona]

He made a deal with the devil and - well - paying his due, eh?

http://youtube.com/watch?v=Qepv1mtYdx0

[joebhed]

Let's see.

Without knowing Jimmy the C's initial pot that he brought to the game, I am not sure I can agree on the amount of his loss, or his gain, or anything else.

What may be more telling is that we cover the story as if the answer is actually in there somewhere - you know, the religious answer. Wha' 'appen , God?

Jimmy, this was not a religious enterprise.
This was business.
Me thinks you better be looking carefully at the financial "services" structure that y'all created, and at those "smart" high-return investment holdings, inflated by some risky mortgages that eventually dwarfed the fewer sound mortgages in the portfolio.
Risky Business.
Does the word brittle mean anything to you?
Brittle little structure there, wasn't it.
At least for the smaller frys among the cabal that is too big to fail.
Damn.
Shoulda bought out a few more competitors while the getting was good.
So, Jimmy, if you want to go looking for things like causes, get serious and admit its all in the mirror and the Boardroom.
You'r gonna need some really serious reparation to get any salvation after this.

[Purple Girl]

He should be arrested and his 61 million confiscated to pay for the SCHIPS funding.
this man and all his paper & physical Assest are collateral for what We were Conned out of, It is at the Very least those samller investors Money. he should be homeless and living hand to mouth.
in fact if a disbled woma Owes Walmart and additonal 58, 0000. then this asshole and his family should be at least 40 Mill in debt too! you gambled You lost - Pay UP!

[WIpatriot]

"God, why hast thou chosen to forsake me?"

These people live in a different dimension.

[totalliberal]

To bad there is no god; otherwise he'd crush this greedy pig in a nanosecond...... Forever.

Thousands of people losing everything and this thing is asking its wife why it is being persecuted.

[robinhood1]

"In the past weeks, together with his wife, Patricia Cayne, who is a student of Jewish religious traditions, Mr. Cayne has spent considerable time searching for comparable events in religious history to see what lessons can be learned from the collapse of his firm..."

Perhaps Mr. Cayne ought to be reading 20th century German history and then hope that things don't turn out that way in the US. Maybe he ought to sell hi co-op at the Plaza while there is still a market for it and assume a much lower profile. What happened in Detroit in1967 cannot be ruled out for New York.

[Thermodynamics]

Military families stationed here in Florida bought houses a few years back and now they have been transferred to the West Coast, or Maryland or overseas, etc. There is no market. The houses are standing empty. They are still shelling out $1000 monthly mortgage payments and paying rent in their new locations. A $100,000 loss is devastating for ordinary families like these.

Bernacke could have bailed out Bear for one-tenth as much. He is spending $30-100 billion at the top of a leveraged financial pyramid. It is cheaper to fix the problem at the bottom. Most of the public do not understand what "leveraged" means. It is like buying commodities on margin.

[JoDeeVa]

They all find god AFTER they find themselves cast aside by that which has been their god, $$$! Now, we the taxpayers, have to bail BS out of the financial crisis to keep the economy from collapsing. While other taxpayers are thrown out their homes, as a result of his and his cronies' gluttony, he gets to "find god" from on high in his pricey digs and a paltry $61+million. Talk about holy..holy cash-cow is more like it! Wonder if I can get that deal by maxing out my credit cards, tapping out my cash reserves and speculating on..oh, say..the $$$ speculators are looking to make on all those repossessed homes. Hey, maybe I'll even stop paying taxes or move those profits offshore. Sweet deal, if you can get it, especially with the help of the Feds.

[maggiemae656]

I guess a simple Internet search on the teachings of the sins of GREED haven't convinced Mr. Cayne? I'm not a religious person, yet I kind of figured there were references to greed and it's curse in the Bible...a query on the word and a little reading on the materials that are returned may actually give Mr. Cayne some of the insight he is looking for.

How do these people get to be such important figures in the business world when they don't appear to have an iota of common sense?

[schatsie]

You betcha, he knew exactly what was happening when he 'EARNED' his billion dollar bonuses and stock options.. (and avoided taxes)....over the last 5 years......

This is criminal negligence to screw the stockholders like they did,,, another fu--ing ENRON and don't you republicans forget it....

[LeftRight]

"...People who have spoken with Mr. Cayne say that he, like everyone at Bear, was stunned by the firm's precipitous collapse and the rock-bottom price of its sale...."

I gotta say, as the chairman of the board, shouldn't he have KNOWN that this was happening????

[LRM216]

Am I supposed to feel sorry for his "poof" and the $61 million he still managed to walk away with? Geez, guess I'm just cold and callous.

[elpollo]

Anyone for a James E Cayne Memorial relief fund? That NY Times article just tugs at my heart strings. We wouldn't want him having to buy choice grade meat. Come on guys and gals, let's ante up.

Oh, I forgot. Uncle Ben is doing it for us (whether we like it or not).

[drkazmd65]

Pretty much what I was thinking too LRM,... just means that the other 90+% of his fortune was smoke and mirrors to begin with.

Not like $61,000,000 is anything to sneeze at - especially since I suspect that was far from his only sets of assets.

Boo-friggin' hoo?

[LeftRight]

That's true, I meant to post something like that, and then I got to that quite I used.....