How the World Works doesn't generally feel positively inclined toward the CEOs of Wall Street investment banks. But Jimmy Cayne, the head honcho of Bear-Stearns, just moved to the top of our list. Why? Because the Wall Street Journal accuses him, in a Page One story that is the talk of the financial press Thursday morning, of being a pothead. Better yet, he's a pothead who likes to enjoy a fat spleef as a way of relaxing from tournament level bridge. You don't get much cooler than that.
Attendees say Mr. Cayne has sometimes smoked marijuana at the end of the day during bridge tournaments. He also has used pot in more private settings, according to people who say they witnessed him doing so or participated with him.
After a day of bridge at a Doubletree hotel in Memphis, in 2004, Mr. Cayne invited a fellow player and a woman to smoke pot with him, according to someone who was there, and led the two to a lobby men's room where he intended to light up. The other player declined, says the person who was there, but the woman followed Mr. Cayne inside and shared a joint, to the amusement of a passerby.
Mr. Cayne denied emphatically that such an incident occurred. "There is no chance that it happened," he said. "Zero chance."
Asked more generally whether he smoked pot during bridge tournaments or on other occasions, Mr. Cayne said he would respond only "to a specific allegation," not to general questions.
In the context of Kate Kelly's Journal reporting, which accuses Cayne of spending much of August out of e-mail or cellphone contact playing golf and bridge, while two hedge funds run by his company imploded, signaling the start of the great credit crunch of 2007, the insinuations are not kind. The clear implication of the piece is that Cayne was not minding the store. But what would you expect from a stoner? A few martinis after a long day for a hardworking chief executive? No problem. But indulging in reefer madness? Utterly beyond the pale.
Felix Salmon provides a roundup of reactions to the Cayne attack. But as far as I can tell, everyone is missing the most important part of this story: There is not one whit of evidence that Cayne smoked marijuana while playing bridge.
This is a critical point. Because if I were a shareholder in Bear-Stearns, that's the kind of news that would alarm me. Bridge requires incredibly sharp attention to detail. You basically need all the skills of a quant fund mathematician to make it through a couple of rubbers alive. You are required to constantly be calculating and recalculating the odds of who is holding what, keep a running analysis of what cards have already been played, and execute long-term strategies both in the bidding of contracts and their execution that need to be adapted on the fly at any moment. Poker's got nuthin' on bridge.
Bridge is not a game for the toker, unless you want your ass handed to you. Ganja simply doesn't mix with an attempt to make a grand slam in hearts, vulnerable and doubled. From the description provided by the Journal, it's clear that Cayne knew exactly what he was doing. There is a time and place for everything.
One hopes, however, that reading this morning's Wall Street Journal hasn't sent Cayne straight to the rolling papers. He's already got reason enough to be paranoid, after this attack.