Cayne Gets Religion

Jimmy Cayne is not very popular these days, but the troops at Bear have nobody to blame but themselves. How could they let a 73-year old stay in power for so long? There was never really any succession planning at Bear, besides vague rumors of Warren Spector waiting in the wings.

I have been beating up on Cayne since June, and truly hoped he would come to his senses and step down:

August 4th
And although Jimmy Cayne does not appear to be ready to fall on his sword, he might not be above nudging Warren along the gangplank. Of course, Jimmy’s opportunity to go out at the top of his game, like Michael Jordan, is now long gone.

Sad, no?

The Gray Lady wrapped it all up today in the wake of Cayne's stock sales hitting the tape, and are getting in their last licks after being played like a fiddle by Cayne in the past. Do you remember the Buffett rumors they bit on?:

In late September Bear Stearns snookered the New York Times into writing an article that propelled the stock to 3-month highs; Bear used the fleeting opportunity to raise fresh capital before the stock subsequently sank to new lows.

Landon Thomas is getting the last laugh, pointing out Cayne is getting a little religion.

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. New York Times

The events with Cayne and Bear have been unfolding for months; Guy Mozkowski floated the idea of a sale of Bear on June 24th:

``If the firm is not able to resolve its position without a meaningful loss, we think likelihood of a sale rises materially,’’ Moszkowski wrote in a separate note on Friday. He estimated that a buyer probably would pay at least $185 per share, or twice the firm’s book value.

Guy eventually came to his senses, and even zeroed in on the issues that continued to build at Bear:

August 28th
“We think that the embarrassments of the past several months and the change in senior management are likely to have some chilling effect on business, beyond just the beleaguered asset-management area, and we believe the Prime Brokerage business is likely to have suffered somewhat more than competitors’ because of clients’ concerns from a counterparty viewpoint, even if these concerns are overdone,”

Jimmy Cayne is now looking for atonement, and might finally take our advice to retire.

But it will come too late, and the Cayne Discount turned out to be catastrophic.

The next chapter will come from books in the works; given how little Charlie Gasparino has been on television, he must already be hard at work chronicling Bear’s demise.

His chapter on the winners in this story is likely to be brief, outside of the hedge funds who bet on Bear’s demise. I don’t know what the book will be called, but have an idea what the cover looks like..

Down $900 Million or More, the Chairman of Bear Sells
New York Times

September 27th
Buffett Said to Consider Bear Stake
New York Times

Merrill’s Mozkowski Changes his Tune
1440 Wall Street

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