'Cool hand Cayne' toughs out crisis

If Jimmy Cayne's card playing is any guide, don't expect the Bear Stearns chairman to make any rash or aggressive moves as the New York investment bank faces one of the worst crises in its history.

A world-class bridge player in his prime, the 73-year-old still plays a conservative game. He uses the same logic and moves he honed in money bridge games at the old Mayfair Hotel in Manhattan nearly four decades ago, card rivals and partners say.

Back then, they say, Cayne was a bridge bum trying to make a living from cards, even if that meant taking money from a teenager.

"I played against him in money games when I was 13, believe it or not," Robert "Bobby" Levin recalled recently.

"I immediately fell in love with him. He's an incredibly personable guy."

Levin, now 49, still considers Cayne one of his best friends, even though the Wall Street chieftan fired him from his team.

"He's always been there for me. He's a tough guy, but so what," he said. "I've had unbelievable fights with him. But when the fighting is over, Jimmy's attitude is like, 'That was fun'."

With no college degree, Cayne landed a job at Bear Stearns in 1969 as an individual investor salesman. His connection inside Bear Stearns was Alan "Ace" Greenberg, then-chairman and CEO of the company and a champion bridge player, too.

Bear Stearns' record-breaking profit run hit a wall this summer amid the collapse of two Bear hedge funds, which made wrong-way bets on securities tied to risky subprime loans.

The setback embarrassed Cayne, whose management team only months before had bragged on a conference call about their savvy in assessing mortgage risk.

Investors spooked

This month, Bear Stearns spooked investors by halting share buybacks to preserve capital in what it called the worst debt market in more than two decades.

Cayne took hits in the press for playing a lot of golf during the meltdown, but escaped the full brunt of the blame.

Instead, he fired a top lieutenant, Warren Spector, another champion bridge player seen as an heir apparent to Cayne.

Bear Stearns declined to make Cayne available for comment for this story. But veteran bridge players who have known Cayne for years say his competitive fire has not waned.

Nor is Spector his only rival bridge aficionado in the halls of power at Bear Stearns.

Cayne's quest for tournament wins has been blocked by a team backed by one of his own corporate directors, Frank T. "Nick" Nickell, a world-class player in his own right.

Nickell, chairman of closely held private equity firm Kelso & Co, and a Bear Stearns board member for nearly 15 years, also sets Cayne's pay as a member of the compensation committee.

Cayne still pays top dollar for bridge stars to play on his team.

He usually practices his game over the Internet about three hours a night until about 10:30 pm, said Michael Seamon, a veteran member of Cayne's bridge team, which also includes four world-class Italian players.

"He plays on the computer almost every single night," Seamon said. "He takes it very seriously."

Disquieting intensity

Bart Bramley, who has known Cayne for more than 30 years from bridge tournaments, said his intensity at the card table can have a disquieting effect on opponents.

"It feels uncomfortable to play against him," Bramley said. "If you make mistakes against Cayne, you're going to pay. I want my opponents to be like that."

Later this month, Nickell's team and another squad will represent the United States in the World Bridge Championships in Shanghai.

Cayne could field a team of players from different countries and compete in the event's transnational competition, but Seamon said he did not expect that to happen.

Levin said it would be a mistake to think Cayne won't recover from setbacks, either in bridge or investment banking.

Agencies

(China Daily 08/24/2007 page16)