We tore through the first big Bear Stearns book this year, William Cohan’s House of Cards, in hopes of some substantiation of reports that the bank’s former CEO (and former billionaire; he’s now a “mere eight figure-aire) Jimmy Cayne liked to smoke weed. But Cohan skipped the issue entirely, as he had in a Fortune interview with Cayne last year. We might say we read those 468 pages in vain, except that we are not convinced marijuana played a significant role in the financial crisis, especially since the Cayne depicted and quoted by Cohan sounds more like an angry drunk than a stoner. Here’s an abridged version of his rant about then-New York Fed President Tim Geithner:
“The audacity of that prick in front of the American people announcing he was deciding whether or not a firm of this stature and this whatever was good enough to get a loan,” he said. “Like he was the determining factor, and it’s like a flea on his back, floating down underneath the Golden Gate Bridge, getting a hardon, saying, ‘Raise the bridge.’ This guy thinks he’s got a big dick. He’s got nothing, except maybe a boyfriend. I’m not a good enemy. I’m a very bad enemy.But he is also a marijuana enthusiast, according to Street Fighters, the new book on Bear written by Kate Kelly (a “cunt…whose capability is zero” according to Cayne.)
Gawker has the relevant excerpt, which includes two incidents of alleged Cayne pot smoking sourced to regulars on the competitive bridge circuit he frequented (often at critical moments in the firm’s demise.) The first comes from Roy Welland, an options trader and Bear client who was complaining about being moved from his suite to hotel managers when he smelled the perfect ammunition for his tirade: blatant pot smoke wafting through the hallways!
While Welland was arguing with the hotel staff, he and his wife noticed a funny smell seeping under the door of his room: pot smoke. Outraged by the hotel’s harassment and the fact that his neighbors were using illegal drugs so obviously that his toddlers might notice it, Welland says he called the Boston police, who sent an officer over to interview them. Afterward, when the Wellands finally left their room to move into the one they had reserved, they saw Cayne’s bridge partner standing in the hall in his underwear, surrounded by a cloud of pot smoke, and heard the unmistakable voices of Jimmy and Patricia Cayne coming from within the room.Sigh. If only systemic risk posed by trillions of dollars worth of unregulated derivatives tied to the value of predatory subprime mortgages were so “unmistakable”…