Daily Archives: August 4, 2008

John Gapper

There is a fascinating piece in Fortune magazine about Jimmy Cayne, the former chairman and chief executive of Bear Stearns, by William Cohan, the author who is working on a book about the credit crisis.

The most interesting aspect of it is that Mr Cayne himself talks candidly about how he failed to prevent Bear from collapsing and having to be rescued by the Federal Reserve and JP Morgan Chase.

One reason was that he was in no physical condition to do so. He collapsed from a prostate infection last September and lost 30 pounds in weight while in hospital recovering. He was 73 at the time.

But the other is that, as Mr Cayne himself admits, he was the wrong man for the job. His background as a broker, trader and card player did not give him much insight into the chaos in credit markets and he compounded matters by firing Warren Spector, the man who ran Bear’s trading operations. 

John Gapper

I have written the second part of the series running this week on the credit crisis, entitled The Big Freeze. My piece is about the future of banking and what are the prospects for independent investment banks.

It starts like this: