A crisis at Bear Stearns Cos. this summer came to a head in July. Two Bear hedge funds were hemorrhaging value. Investors were clamoring to get their money back. Lenders to the funds were demanding more collateral. Eventually, both funds collapsed.
During 10 critical days of this crisis -- one of the worst in the securities firm's 84-year history -- Bear's chief executive wasn't near his Wall Street office. James Cayne was playing in a bridge tournament in Nashville, Tenn., without a cellphone or an email device. In one closely watched competition, his team placed in the top third.
As Bear's fund meltdown was helping spark this year's mortgage-market and credit convulsions, Mr. Cayne at times missed key events. At a tense August conference call with investors, he left after a few opening words and listeners didn't know when he returned. In summer weeks, he typically left the office on Thursday afternoon and spent Friday at his New Jersey golf club, out of touch for stretches, according to associates and golf records. In the critical month of July, he spent 10 of the 21 workdays out of the office, either at the bridge event or golfing, according to golf, bridge and hotel records.
Mr. Cayne evidently didn't court business on the links, as some CEOs do. "The golf course for him was an escape," says John Angelo, a hedge-fund client and frequent golf partner.
Needless to say, Cayne is a Bush Pioneer, raising funds at a record clip for that other record-breaking lover of leisure, George W Bush.
This camp of Bush-enabling rich incompetents also includes Stan O'Neal, the Merrill Lynch Chairman who "retired" having lost $8 billion and having kept $161 million for himself; Todd Farha, the Medicaid fraudster behind Wellcare (see a couple of posts below this one); and, of course, the ur-fraudster Ken Lay of Enron fame, who helped finance Bush-Cheney in 2000 on a fat cushion of imaginary profits.
In the critical month of July 2007, James Cayne played golf and bridge. Which reminds us that in the critical month of August 2001, another "CEO" was goofing off with golf and photo ops.
Has uselessness and harmfulness ever been so richly rewarded?
UPDATE:More Republican misbehavior in men's rooms. Omitted above is the Journal's most tabloidesque revelation about James Cayne: "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."
I will write about stoner Republicans another day. Today's theme is rich rewards for lazy incompetence.