Vegas & The Aftermath - Diary

[DMorgan]

With the existence of the smoking ban and most people being considerate of non-smokers we've greatly reduced the amount of passive inhalation that non-smokers are exposed to. Once thats gone I'm struggling to find reasons to justify people preaching about smoking but not obesity.

Because if I'm eating a pie you won't get secondary fat....

[Amatay]

I really should read this diary more. It's superb!

[tikay]

I really should read this diary more. It's superb!

"superb"?

That's a little strong, I'd say mainly bland, though it does occasionally manage to raise itself sufficiently to become truly mediocre.

But thank you, Mr Tay.

Where are you these days? Geographically, I mean, not in the space cadet* sense.

* Yes, I just discovered the meaning of "space cadet". I may just be a space Sergeant. 

[tikay]

Am reading "House of Cards" right now, a wonderful read. Nothing to do with poker, despite the title.

It chronicles the demise of the iconic Wall Street Investment Bank, Bear Stearns, who crashed & burned spectacularly after a "run on the Bank", precipitating the so called "Credit Crunch".

Bear was run by, & had been for some time, Jimmy Cayne. He had taken over from Alan "Ace" Greenberg, but they later fell out big time. Jimmy was known as a bit of a chancer, & a big time marijuana user.

Jimmy had "stock" in Bear Stearns worth just over a billion dollars pre-crash, days later, he sold the lot for $60 million. A lot of money, maybe, but that's quite a drop in a matter of days.

Jimmy was understandably (though wrongly) a bit annoyed with the New York Federal Reserve, who COULD have saved Bear Stearns by opening something called the "discount window".  This was available to pukka banks, to ease liquidity flows in the credit market, but not to Investment Banks. He had pleaded to allow it to be used to save Bear Stearns, but they refused to yield, & the 85 year old firm was swallowed up by J P Morgan. Who WERE allowed access to the window. 

Within - quite literally - minutes of Bear Stearns folding - the Fed opened the discount window to Investment Banks.

Poor Jimmy was a bit cross about this, what with him losing nearly a billion of his personal wealth, & his company, employing 15,000 souls, going belly up & everything. 

He hid his anger well though, when he said this to Tim Geithner who was responsible for the "window", in his role as President of the New York Federal Reserve. Tim is, these days,  the US Treasury Secretary.

.....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.

Like he was the determining factor, and it's like a flea on his back, floating down underneath the Golden Gate Bridge, getting a hard on, 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 certain things really - that bothered me plenty.

It's just that for some clerk to make a decision based on what, your own personal feeling about whether or not they're a good credit?

Who the fuck asked you?

You're not an elected officer. You're a clerk. Believe me, you're a clerk.

I want to open up on this fucker, that's all I can tell you".     

[tikay]

So, this Jimmy Cayne was a bit miffed.

If you had just lost a billion, I expect you would be too, even if it was your own fault. And to a large degree, it was.

The "run" on Bear Stearns was lightning fast, it was all over in 2 or 3 days. That quick.

These Investment Banks need overnight "repo" funding daily, to the tune of billions of dollars, because they are leveraged 40 or 50 tmes their equity. The moment that dries up, they are stone cold dead. And that was what happened. Other Banks got word that Bear was wobbly, had lots of toxic CDO's & other low-grade mortgage debts on their books, & sensed the opportunity to kill a competirtor. Brutal stuff, in a dog eat dog world, & to be fair, Bear were the champions at this sort of thing. Animals. 

And where was Jimmy Cayne whilst this was all going off? Well here's the thing.

He was down in Florida, playing Bridge. Whilst his house burned down, he was playing Bridge.

The Board convened a Telecon, & hooked Jimmy up, but after a while, the line went dead.

Jimmy? JIMMY?

So they rung his missus, who was sat next to him.

"Is Jimmy still there?"

"No, he went back to his Bridge game".

[tikay]

Jimmy was a very good, & well-known Bridge player.

Until I read this book, though, I never realised that there is HUGE money in Bridge.

Jimmy used to play several Bridge Tourneys annually, and as you know, Bridge is played with partners.

So Jimmy HIRED IN three Bridge Pros, to be his partners in these Tourneys.

The cost?

Each Pro Bridge Partner was hired for 3 weeks per year. Cost? $500,000.  Each. Per 3 weeks.

A few poker players might be well-advised to take up dat Bridge lark.

$500,000 for three weeks a year, to play Bridge? Jeez, we don't know we've lived!

[tikay]

Here's Jimmy with, I assume, a little help from photoshop. Or maybe Tim Geithner.

[tikay]

...and here's the book. If that sort of thing interests you, go buy it, it's a real beaut.

Or I suppose you could watch Big Brother, which starts tonight on Ch 5.

[tikay]

Before I shut up this blathering, which I'm pretty sure will bore the socks off most, I just found this link.

It's far more accurate, in every way, than my riddled memory efforts, & differs from my version a fair bit.

Could have saved myself a lot of time if I'd found it earlier.

Still a great story though.


http://money.cnn.com/2008/07/31/magazines/fortune/rise_and_fall_Cayne_cohan.fortune/index.htm

[redsimon]

...and here's the book. If that sort of thing interests you, go buy it, it's a real beaut.

Or I suppose you could watch Big Brother, which starts tonight on Ch 5.

And if you do buy it use the link on Blonde for Amazon?



Only £7.79 too. Bargain

[redarmi]

Thought you were talking about "House of Cards" the book by Michael Dobbs which was turned into a TV serial starring Ian Richardson.  That was the first TV show I absolutely could not miss.

[DMorgan]

All very interesting stuff!

After having in on the 'to watch' list for months I managed to watch 'Inside Job' last week.

Absolutely baffling how the financial sector flat out denies the most blatant conflicts of interest with regards to the safety of investors money. The big firms' attempted pollution of the teaching methods for Economics at Ivy League schools in the US is all a little bit too close for comfort too.

[Karabiner]

Horse-drawn trams on BBC4 right now if you feel like a little nostalgia.

I'll get back to you on the subject of bridge, I used to be friendly with a top pro called Smuel Lev.

[tikay]

Horse-drawn trams on BBC4 right now if you feel like a little nostalgia.

I'll get back to you on the subject of bridge, I used to be friendly with a top pro called Smuel Lev.

Thanks Ralph.

I've since discovered - as to those Bridge Pros - that there is no prize money in Bridge, or not "proper" prize money, just buttons.

So when Jimmy Cayne - & no doubt other well-loaded businessmen - hire in these Bridge pros for Tourneys, it's all about ego.

We live in the strangest of worlds.

I've been reading up via my friend google all day about Jimmy Cayne. Jeez, some stories around about him.

The Bear Stearns book had a lovely anecdote about one of the Bear Stearns founding partners, back in the 1920's I think, who worked in a shoe shop, & managed to sell not one, but TWO pairs of shoes, to a dead man. Alligator skin shoes, very nice too.

And so was set the moral tone for Bear Stearns.

[tikay]

Horse-drawn trams on BBC4 right now if you feel like a little nostalgia.

I'll get back to you on the subject of bridge, I used to be friendly with a top pro called Smuel Lev.

You knew Samuel Lev?

Ten times World Bridge Champion, no less. (google told me that).