This NYTimes article provides the most detailed account of a firing I’ve ever read in a paper. Warren J. Spector at Bear Stearns got the boot because his unit controlled the hedge funds that imploded a few weeks back. The first hint that it’s a weird article is the description of the firing:
Sitting behind his half moon desk on which stood computer terminals and a large metal-box lighter, Mr. Cayne broke the news to Mr. Spector that he wanted his resignation.
Seemed like a little more info than we needed. Then it began exploring the two men’s history with the game of bridge:
Indeed, with Mr. Spector’s own talent for bridge — he achieved the rank of life master at age 16 in 1974 — and his expertise in all varieties of bonds, it was widely assumed that Mr. Cayne would pass on the reins to Mr. Spector. (The two men’s devotion to bridge is highlighted by the fact that they both attended the North American bridge championship in Nashville late last July, at a time of increasing turmoil in the credit markets.)
But while bridge might have functioned as a bonding agent between Mr. Cayne and his predecessor, Alan C. Greenberg, it could not do the same for Mr. Spector — especially in the wake of the hedge fund meltdown at the firm’s asset management division.
Did I mention there’s too much detail?
In part this was a function of their sharply different personalities. Mr. Cayne is a raw, cigar-chomping man who embraces the scrappy, street-fighting ethos of the firm. Mr. Spector, who wears his thick head of hair longer than that of the standard banker, has more of suave, relaxed affect.
I guess the big question is: which guy’s the better bridge partner?
(Update: The WSJ article on Spector’s firing adds even more details, including the facts that he “wears black-rimmed glasses and maintains a trim physique”. . . and that he attended St. John’s College, where I got my master’s degree)
And Mr. Spector gave the college roughly $7 million for a new dorm not too long ago ….
Dag! I hope the check cleared! That WSJ article expands on the bridge-playing thing. It also characterizes Cayne’s office as “smoky” and “dimly lit.”
I don’t think I’ve written about this subject yet, but here’s my take on the subprime loan disaster: No matter what financial instruments are arrayed to change its appearance, and no matter how broad the investor base is, there’s no changing the fact that this part of the market was based on loaning money to people who are poor credit risks. I’m sorry that the larger market is tanking because of it, but if you build on a crappy foundation, you’re gonna sink.
I asked my husband the same thing yesterday morning as he read the WSJ article aloud at the breakfast table — yes, the check cleared, and I would guess we’ll be seeing more of Mr. Spector’s generosity in the future, this little incident notwithstanding.
I heard on the radio this morning that Hillary wants to set up a fund to help out everyone affected by this subprime disaster. The phrase “limited goverment” simply has no meaning anymore these days …
I, for one, am scared that Joel & I would have the same reaction about almost anything. But I’m being mean.
Evidently, John Edwards believes we need universal college coverage.
And according to the WSJ this morning, the prime market is also getting him (rates on jumbo loans going up):
http://online.wsj.com/article/SB118644741706689960.html?mod=hpp_us_whats_news
You should always worry when you and Joel are thinking the same way — I sure do. :-)
I still think the smartest thing I did at St. John’s was not taking a swing at him when he fouled me (accidentally, but hard) during a fast break.
Looks like Jeff Matthews (who is not making this up) is in the same boat, re: Subprime:
http://jeffmatthewsisnotmakingthisup.blogspot.com/2007/08/what-happens-in-sub-primegets-to-spain.html
Isn’t it the right of every American with a household salary of $50,000 and sketchy credit to own a $400,000 house? Why shouldn’t we taxpayers help bail out those who have been living beyond their means?
Bear Stearns is known among its Wall Street peers as a lean, flat, entrepreneurial organization, and you may remember many years ago a book by Ace Greenberg entitled Memos from the Chairman which shared his thrifty suggestions to reuse paperclips and rubber bands. He also set a strong expectation for individual philanthropy among employees. It’s good that St. John’s has benefitted already.