May 9, 2008
Depression and dog shows at Bear Stearns
I can’t say I agree with Felix Salmon and John Carney that the most interesting anecdote in the great New York Times piece about the feud between Alan Greenberg and Jimmy Cayne at Bear Stearns was the following:
The final straw for Mr Cayne was Mr Greenberg’s decision to charge Mr Cayne a commission of $77,000 for the sale of his six million shares of Bear stock, a rate far above the maximum $2,500 commission that employees pay for a single trade. Since Mr Cayne was not an employee anymore, he did not deserve such a rate, Mr Greenberg said. “If he doesn’t like it, he should do his future business elsewhere,” he added.
Actually, I prefer this one:
Mr Greenberg says he did contemplate leaving, in part because his views were not being heard and for another reason as well. “I was depressed. My dog was sick,” he said. “He had not been performing well in dog shows.”
I think that, while the first story speaks well to the pettiness that can erupt between two old friends and colleagues when an institution disintegrates, the second says something about the oddity of Bear’s executive culture.
The lesson, I think, is that both men were too old and out of touch to be in charge of their institution, particularly in a time of turmoil.
Mr Cayne, 74, was chairman, but was seriously ill last summer and spent a lot of time out of the office at bridge tournaments as Bear crumbled. Having been around for so long - and been originally hired by Mr Greenberg when he was earning his living playing cards - he lost touch with his responsibilities.
Meanwhile, Mr Greenberg, who is 80, was revered for his past leadership of Bear and for his witty, irreverent manner. That is fine, but he was allowed to remain chairman of the risk and executive committees, which was ridiculous.
I wrote in a column that Bear’s leadership was “old, self-satisfied and inbred”and this article provides no reason to change that view. I imagine a lot of employees must wish a plague on both Mr Greenberg’s and Mr Cayne’s houses.
Business aside, Mr Cayne and Mr Greenberg are quite interesting men. Mr Greenberg charging commission on Mr Caynes stock sales was
petty, akin to trumping an ace of Mr Caynes with the lowest card in the trump suit. A deliberate act of one-upmanship? But also (as our family has owned dogs for at least 80 years, Basset hounds, labradors and cocker spaniels) I am sure that Mr G, a dog owner, cannot be ALL bad. DEEP DOWN, imo, he is “sympa” (sympathique) as the French say.
Mr Caynes is, like Peter Fleming who created James Bond, a top-class bridge player and also a golfer. I have therefore no doubt whatever that he is enjoying his (enforced)retirement.
But both have failed miserably as employers - apparently. Perhaps investment bankers looking for a job in future should ask a few questions about the chairmen of the outfits where they are being interviewed, like “The chairman - has he gotta dawg?” or “The chairman - is he a card player? Poker or bridge?”
Posted by: J.J. | May 9th, 2008 at 2:56 pm | Report this commentas an entrepreneur i always admired the free flying spirit of the boys at bear. one can question their judgement back in ‘98 when the ny fed looked for the bear’s participation in the ltcm bailout and met with a resounding “let ‘em sink”. and certainly the foray into derivatives destroyed the firm but in the phony button down world of wall street it was great to have a couple of swashbucklers around that cut their own path through the jungle. times change and people don’t. we greyhairs are doomed by the sands of time. nature dictates that things will pass us by.but there is some comfort in knowing that it was the young quants that blew the biggest hole in the wall street facade. and for you dawg lovers- rescue a greyhound. you’ll never be happier.
Posted by: gym-bob | May 9th, 2008 at 8:24 pm | Report this commentthe beautiful state of colorado is closing a dog track quite soon if it has not already. 800 greyhound racers will be put up for adoption. if not resued they will likely be put to death. if mr cayne or other dog lovers see these words plese consider taking one of these amazing athlete/dawgs home. they are amazing and give more love than most humans can ever want.
Posted by: gym-bob | May 11th, 2008 at 8:39 pm | Report this comment