Both Jerry Garcia and I were offended by
The Wall Street Journal
hit piece on
CEO, Jimmy Cayne, yesterday. Since Jerry's dead, it's up to me to defend Cayne.
story insinuated that Cayne's personal habits affect his ability to run his firm. It's a ridiculous assertion. I can't speak to recreational pot-smoking (which Cayne denied). But I do happen to play bridge, golf and poker, and I would argue those activities are a benefit to any CEO.
I feel a bit awkward defending Cayne. I don't like him very much, but I do respect him. Normally, I confront him at the bridge table, where we compete against each other at the highest levels. We both enjoy the mental challenge of the game, we hate to lose and we never surrender. These are excellent qualities at the table and in corporate America.
I most recently played bridge against Cayne in June. Our teams competed against each other in the opening stages of the International Team Trials, which decides who will represent the U.S. in international competition. We played a short match in a round robin, and my team narrowly defeated his team.
Being at a bridge tournament doesn't prevent one from working. I can't speak for Cayne, but I worked from my computer on one of the weekdays I was there in June. Often the schedule allows for the morning off, and the afternoon game begins at 1 o'clock. Many of the events are team games, with six players on a team. But only four players are required at any one time, which allows for time to work or relax.
I know for a fact that Cayne has skipped bridge tournaments, though I can't say it was for business. In those instances, his team has played on with him as a nonplaying captain.
Cayne also plays golf. It appears he sometimes plays on a Thursday afternoon or Friday morning. Gasp! Stop the presses. Oh, and helicopters fly people places.
If I were going to criticize Cayne, it would be on his merits as a CEO. The article contradicts itself in this regard. It presents a false contrast about other CEOs being more personally involved in the crisis over the summer, like Jamie Dimon of
, Richard Fuld of
and Lloyd Blankfein of
. Obviously, Cayne flew to China to seal a partnership deal to strengthen his firm's balance sheet. I don't see a distinction.
Let's face it. All the Wall Street firms took on a huge amount of risk in the credit market. They put together deals involving collateralized debt obligations that were marked-to-model. This means they were evaluated on a financial model, not any real-world market value. Obviously, the models were wrong. Everyone got hurt in the carnage, which continues because nobody is certain what looms on those balance sheets.
The person in charge of bonds and modeling at Bear Stearns was Warren Spector. Spector was also the heir apparent at the firm and presumably capable of handling a credit crisis. When it purportedly became clear this didn't occur, Cayne asked for his resignation.
I wouldn't have minded the piece if it made credible claims he didn't do his job. It did not. Cayne acted as any CEO should. He trusted his best man to resolve a crisis and fired him when he felt this trust was breached. But leave the superfluous, nonsensical and misplaced bridge and golf references out of it.