This is Dimon's 1974 yearbook senior page from the Browning School, the upper-east-side private academy he attended. We first learned about the yearbook in Duff McDonald's biography Last Man Standing, and knew that we needed to see the whole thing for ourselves. We put out some calls to find the rest of it and got a friendly source to scan in Dimon's whole page from the Grytte.

Sadly, Dimon didn't share Neel Kashkari's high-school obsession with sports cars. But he did clearly fit in with the waning hippie look of the mid-1970s.

Dimon's still got a reputation as something of a poor dresser. Here's how Last Man Standing biography describes his sartorial acumen:

He also eschewed the traditional uniform of the B-school student-khakis and button-down shirts-and wore jeans and often a blue leather jacket. His classmates actually remember that of the 75 students in their year, Dimon was the absolute worst dresser.

[snip]

His casual weekend wear was black jeans and a black t-shirt. "Jamie was dressed like Johnny Cash," laughs one executive. "I guess he thought he looked cool. But he didn't."

And here's what Andrew Ross Sorkin's new bailout book has to say about his jeans preferences:

A fed staffer announced to all the CEOs that Paulson, Geithner, and Cox would soon be coming downstairs. When Jamie Dimon, dressed in tight blue jeans, black loafers, and a shirt showing off his muscles, wandered into the room, Colm Kellcher whispered to John Mack, "He's in pretty good shape for his age."

You'd think someone who made $30 million in 2007 would be able to afford to pay someone to dress him better. Here are some close-ups of the good pictures.

The educational mission at Browning's is to turn out "Browning gentlemen," and Dimon sure looks like a gentleman, doesn't he? Right down to the ruffled jeans-and-tie bit and the long-haired Himalayan searcher pose.

Dimon chose to adorn this photo the Hamlet motto, "This above all: To thine own self be true," rounding out the nonconformist-outsider theme of the page. We wonder if he once shared former Bear Stearns chief Jimmy Cayne's penchant for pot—which would be funny, seeing as how Dimon earned his reputation as Wall Street's last man standing after he bought Bear Stearns at a measly $2-per-share, averting a financial catastrophe.

He's thankfully trimmed his hair down to a more manageable—and less androgynous—length.

Cayne was outed as a weedhead by the WSJ a couple years back, which you might think is kind of a cool thing for a Wall Street CEO, except for the fact that Cayne liked to knock off from work for long stretches while his entire firm was collapsing into dust, which is just typical stoner behavior. He liked to play bridge and smoke spliffs for ten days, for example, rather than go to work at Bear Stearns. Which was probably more fun, but still: the whole "firm collapsing" thing. Not good.

But Cayne had another habit that would soon cause the firm embarrassment:
He liked to smoke marijuana. This pastime was well known to some close associates, who had seen him smoking in his Park Avenue apartment. It had also come to the attention of some of the regulars on the bridge circuit, where Cayne was known to retire to his room after the day's play and tuck into his pot stash as a way to relax.

Roy Welland, an options trader, Bear client, and tournament regular, still remembers a particular run-in he had with Cayne during the Boston championships in November 1999. On the night Welland and his family arrived at the hotel, their room hadn't been ready, so they were put in a bedroom in the presidential suite, whose occupants had not yet arrived.

The following morning, Welland's two-year-old twin boys were still asleep when the hotel management called to say that the presidential suite's expected guests had arrived and that the family would have to clear out. But Welland's reserved room still wasn't ready, and after a long evening of travel, he didn't want to wake the sleeping boys. Still, the hotel was insistent, and security was soon banging on the door, asking the family to leave.

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. Cayne, through representatives, denies the incident. Boston police department records reflect that officers responded to a call from a Roy Welland staying at the Westin Hotel during that time period, but do not mention either Cayne or a marijuana smell. Hotel management declined comment.

Five years later, Cayne's marijuana use was discovered by another bridge-circuit regular at a Memphis Doubletree. After the day's competition, he invited a fellow player and a woman to join him for a smoke in a lobby men's room. The player declined, but the woman followed him in and shared a joint with Cayne, to the amusement of a third party, who was finishing up in the men's room when they arrived. Cayne and the woman were standing just inside the doorway, near the sinks. In November 2007, the Memphis story was disclosed in a front-page article about Cayne in the Journal, though Cayne denied the incident. He later told Fortune, "There is no chance that it happened," he said. "Zero chance." But when asked about his pot use generally, he refused to answer, saying he would respond only "to a specific allegation."

For years, these situations remained mostly under wraps, as Bear and its CEO remained feared and admired. But as the housing boom showed its first signs of strain, Cayne's foibles seemed less amusing.

The book, Street Fighters, is coming out tomorrow. Kelly's having a release party tonight at the Four Seasons. On the invite list: former Bear CEO Alan Schwartz, CFO Sam Molinaro, and former CEO Ace Greenberg. Not on the list: Jimmy Cayne. She should give out free weed just to make it more of a BURN.

[Excerpted from STREET FIGHTERS: THE LAST 72 HOURS OF BEAR STEARNS, THE TOUGHEST FIRM ON WALL STREET by Kate Kelly by arrangement with Portfolio, a member of Penguin Group (USA), Inc., Copyright (c) Kate Kelly, 2009.]

WSJ reporter Kate Kelly is writing a book on the fall of Bear Stearns. But hers isn't done yet. But another book on the fall of Bear Stearns, House of Cards by William D. Cohan, just came out. And Kelly was surprised to find that Cohan's book included a quote about her, from former Bear CEO Jimmy Cayne, who called her a "cunt... whose capability is zero." And Cohan didn't contact her in advance, so Kelly never had a chance to respond. She probably couldn't have been perfectly candid even if she did respond, so here you go, Kate: Jimmy Cayne is an asshole.


The Washington Post is folding its standalone business section into the main news section to cut costs, as other papers have done. Luckily there is little business news these days.

Former Bush roboflack Scottie McClellan just had a baby (his wife, actually)! Can you imagine what a flag-burning hippie this child will grow up to be, according to the standard model of anti-parent rebellion? Should be great.


Hmmm, former employees of the now-dead Rocky Mountain News want to start a new online news site—"But the launch will only take place if In Denver Times lines up 50,000 subscribers [at $4.99/ month] by April 23." In other words, the launch won't take place.

Octogenarian gossipmonger Liz Smith—who is now permanently employed by a website, full time—tells Intelligencer that she just recently learned how to use email. "I would still be writing with a feather if they'd let me," she joshed jokingly, the kidder. If you think about it email is actually way easier than writing with a feather, so what's the big deal?

Panic, by its nature, is an unreasonable fear that seizes one suddenly. But it comes after a series of shocks that drain confidence and stoke worries. Such was the Panic of '08: a torrent of news, bad turning to worse, which by its very ceaselessness made the hardiest souls cringe.

One can point fingers, document the bonus-driven greed of bankers, explain the overly complex financial vehicles which spun out of control. But trying to explain it all away misses the point — that sheer chaos overtook the world of money.

March

Bear Stearns reveals massive losses in two in-house hedge funds from securities linked to subprime mortgages. CNBC stock shouter Jim Cramer insists the company is fine. Six days later, JPMorgan Chase agrees to buy it for $2 a share, with the government guaranteeing $30 billion in losses.

July

Treasury Secretary Hank Paulson, in an effort to bolster the stock price of mortgage lenders Fannie Mae and Freddie Mac, gives their debt an explicit guarantee. His move backfired: Shareholders, seeing the prospect of a government takeover which would wipe them out, sell their shares.

September

Paulson announces that the government is taking over Fannie Mae and Freddie Mac. Lehman Brothers, unable to find a merger partner or negotiate a government bailout, files for bankruptcy. As laid-off Lehman employees walk out of the office with their possessions boxed up, two men make out in front of a CNN reporter's live camera.

AIG, which had guaranteed billions of dollars in financial contracts linked to subprime mortgages, teeters on the verge of bankruptcy before getting an $85 billion infusion from the government.

Merrill Lynch sells itself to Bank of America. Goldman Sachs and Morgan Stanley convert themselves into commercial banks. With that shift, there are no more investment banks left on Wall Street.

Banks stop lending to each other. Stocks plunge. Even the price of oil drops below $100 a barrel. Washington Mutual is seized by regulators and sold to JPMorgan Chase.

October

Congress passes a $700 billion rescue plan. Stocks continue to drop as economic figures show the economy was faltering even before Wall Street's collapse. Ferrari-loving ex-Goldman Sachs banker Neel Kashkari is hired to oversee it. The former rocket scientist rapidly proves too geeky for the job. The Dow falls below 10,000, then 9,000. Citigroup tries to buy Wachovia and fails; Wells Fargo buys Wachovia instead.

Layoff fears hit Silicon Valley: Partners at Sequoia Capital, the venture-capital firm which backed Apple, Google, Cisco, and Yahoo, among others, urge their companies to cut costs quickly. Dozens follow suit in pink-slipping employees.

November

The contagion spreads to Detroit: U.S.-based automakers report dreadful third-quarter sales. The chiefs of GM, Ford, and Chrysler fly to Washington to ask for a bailout — in private jets.

Government bailout genius Neel Kashkari appears to be stress eating.

Citigroup stock drops 60 percent in a week, prompting the government to invest $20 billion and guarantee a $306 billion portfolio of securities against losses.

The S&P 500 drops to 1997 levels, wiping out a decade-plus of gains.

On Black Friday, a group of shoppers break into a Wal-Mart before it opens and trample a worker. Holiday sales prove dismal.

December

Post-Thanksgiving layoffs sweep the New York media. Yahoo throws a series of holiday parties, and then lays off 1,500 employees. Bank of America CEO Ken Lewis suggests only idiots actually lend people money. Everyone resolves to pretty much give up until Barack Obama's inauguration.

it doesn't happen if your company has a sane and convincing leader who can go on CNBC and say, "here, look at our books! Our firm has such robust ratios of cash and hard tangible assets to covenants and other accounts payable that it really doesn't matter what our stock price does because, familiar as we are with the pussy nature of Wall Street confidence and the easily-distracted myopic ephemera-addled lemmings who govern such day-to-day fluctuations, we've seen to it to inoculate our business from such attacks by stockpiling enough hard currency and solid — but also liquid! — financial instruments that we can weather a crisis of confidence without having to undermine our case by begging them for money!" Lehman had no such leader. And it had no such assets!

One of the less-noted upshots of this whole Lehman mess is that maybe the Fed didn't give it the proverbial "Bear Hug" because it seemed like less of a victim of "scurrilous malicious rumors" than Bear Stearns did. And Bear had that pothead CEO! But Lehman seemed to have a victim complex about the rumors, as Andrew Ross Sorkin noted in July:

“I will hurt the shorts, and that is my goal,” Richard S. Fuld Jr. fumed.

It was April, and Mr. Fuld was blaming short sellers, one of the most maligned tribes on Wall Street, for spreading rumors about Lehman Brothers, the troubled investment bank he runs. Shorts bet against stocks, and Lehman, they were whispering, looked like the next Bear Stearns.

A Wall Street Journal story the next week portrayed him — as Cramer did the same week — as more concerned with shaming promulgators of bad rumors than figuring out the extent to which they were true:

Lehman Brothers Holdings Inc. CEO Richard Fuld Jr., whose firm's shares also have been battered, also has contacted Mr. Blankfein. "You're not going to like this conversation," Mr. Fuld told Mr. Blankfein, according to people familiar with their talk, but he was hearing "a lot of noise" about Goldman traders who allegedly spread negative rumors about Lehman. In recent months, Mr. Fuld has contacted traders he felt may have been bad-mouthing his stock, according to someone familiar with the matter. Spreading rumors one knows to be false with the intention of manipulating a public company's price is illegal.

The thing is, while Lehman seemed to have an army of friends willing to discredit the rumors at the risk of looking totally fucking ridiculous:

Absurd rumors can have legs, like the Lehman-Barclays one, which Richard Bove, an analyst at Ladenburg Thalmann, said “ranks up there with the moon is made out of green cheese in terms of its validity.”

(The specific rumor in question, and the subject of the Sorkin piece, was that Lehman might be acquired by Barclay's in a "take-under" whereby the British bank paid a discount to Lehman's stock price. Barclay's is currently in talks to do essentially that, with a whole lot less headache!)

But here's the big thing: Lehman had the nicest, most polite short-seller in David Einhorn. He made his short position public, for god sakes.

Very few people publicize their shorts, and when Einhorn did, it got Lehman’s attention. The conversation with Callan was to give her a chance to explain discrepancies he had uncovered between the firm’s latest financial filing and what had been discussed during its conference call about that filing… She was evidently not prepared for the complexity of Einhorn’s questions and tried to bluff her way through. “The conversation was reminiscent of the ones I had with Allied,” says Einhorn. “We had our questions, we were organized, but she was evasive, dishonest. Their explanations didn’t make any sense.”

Dear Lehman, Sarah Palin can do this because she is talking to people who don't have money. (And will have even less when she is through with them!) (Related: someone could use a better shade of lipstick!) In the meantime, the shorts and their self-hastening prophecies perform some of the last remaining regulatory functions on Wall Street, and in the aftermath of Enron I will never understand why they are so maligned. Doesn't Wall Street, like the post-9/11 Justice Department, need someone to poke away at its hubris, its secrecy and its destructive tendency to act as if it can impose its will all the time with impunity? Which is to say, the rumormongering shorts are so widely detested because they are like the media, only with money.

Short Interest Data: Lehman, AIG, Merrill [Seeking Alpha]
Pssst! Hear The Rumor Of The Day? [NYT]
Why Did David Einhorn Publicly Attack Lehman Brothers? [NYM]
Fear, Rumors Touched Off Fatal Run On Bear Stearns [WSJ]
The Man Comes Down On Rumormongering [Daily Intel]
Goldman Sachs Accused Of Rumormongering [NYM]

Oh, P.S., ha ha ha, Howard Stern punked everyone, no wonder our tipsters at Lehman seemed a lot less sanguine than these guys. But bankers of the banks, take it from the media, which might not be so entranced by this recession if our entire industry weren't in the throes of an irreversible decade long contraction: fucking is superior to financial success! And there is a whole world of people who work in economic sectors like "education" and "music, ha ha ha" who would not even think to equate one with the other. So take heart; at least your industry can't exactly go anywhere — someone has to figure out how much money your industry owes China and it's not going to be anyone who has spent the year cultivating microfame! — and in the meantime, get drunk, screw someone ill-advisedly and take heart in the fact that when people like me lose jobs, we have to borrow money from journalists.

Sex Diaries: The Overserved Ivy Banker [NYM]
Earlier: In Tough Economic Times, Bankers Long For Intimacy With Their Happy Endings

Dimon, you see, was on Charlie Rose's TV show last night, where he said the following about the fall of investment bank Bear Stearns:

Where there is smoke, there's fire... I think the Securities and Exchange Commission should investigate it, okay? I think if someone knowingly starts a rumor or passes on a rumor, they should go to jail.

Set aside, for the moment, the absurd notion of financial markets functioning without the free flow of all kinds of information, rumor included.

Consider, instead, how Dimon's proposed censorship would impact his onetime fan Kneale in light of how Vanity Fair described Kneale's own role in the spreading gossip about Stearns:

By noon, when CNBC anchor Bill Griffeth opened Power Lunch, Bear’s stock was down more than $7, to $63. “There are rumors out there that some unnamed Wall Street firm might be having liquidity problems,” Griffeth noted. A correspondent on the show, Dennis Kneale, a veteran of The Wall Street Journal, said, “The speculation at this point is that it’s Bear Stearns. They’re down the most in the market today. Supposedly, a couple of weeks ago, they started looking at a way to try to shop their clearing operations [They] couldn’t find a buyer. At least that’s what one guy says.”

Does Kneale think it's something other than rumormongering to pass on the "supposed" information that comes from "what one guy says?"

More likely, he is just slower on the uptake than his rival Gasparino, who was also depicted by Vanity Fair spreading unvetted information and thus another likely victim of Dimon's prison policy. Perhaps if Dimon has his way, Kneale will have the chance at an extended tutorial of some sort from Gasparino, in their cell.

[Dealbreaker, Vanity Fair]

On a conference call after the buyout agreement is reached:

Messrs. Geithner and Dimon led off with some brief remarks, noting that J.P. Morgan would be guaranteeing Bear Stearns's debts and that if the pact hadn't come together, the market impact may have been catastrophic. During the question-and-answer session, Citigroup Inc.'s new CEO, Vikram Pandit, spoke up.

Mr. Pandit — who did not initially identify himself — asked a shrewd but technical question: How would the deal affect the risk to Bear Stearns's trading partners on certain long-term contracts?

The query irked Mr. Dimon. "Who is this?" he snapped. Mr. Pandit identified himself as "Vikram." Offended that Mr. Pandit was taking up time with what he considered granular inquiries, Mr. Dimon shot back, "Stop being such a jerk." He added that Citigroup "should thank us" for staving off further mayhem on Wall Street.

Dimon rallies his new employees:

Standing on the dais with two senior lieutenants, Mr. Dimon tried to strike a conciliatory tone.

Bear Stearns's "shotgun marriage" to J.P. Morgan "is not the sort of thing we set out to do," he told the audience. Noting the pain for Bear Stearns managers facing the prospect of unemployment and big losses on their Bear Stearns stock, he added: "We can't begin to imagine how difficult this is."

In the tense question-and-answer session that followed, Ed Moldaver, a stocky, 40-year-old broker, stood up.

"This isn't a shotgun marriage," he said. "This is more like a rape."

As some in the room shook their heads and muttered uncomfortably, Mr. Dimon stared stonily at the crowd.

[WSJ]

Bear Stearns executives believed another public statement was needed. Arrangements were made for Mr. Schwartz to appear from Florida on business network CNBC.

Minutes after 9 a.m. on Wednesday, Mr. Schwartz told the cable-TV audience, "Some people could speculate that Bear Stearns might have some problems...since we're a significant player in the mortgage business. None of those speculations are true."

But before he could get through his talking points — which included mentioning the firm's strong cash reserves and indicating to investors that Bear Stearns would have a profitable first quarter — Mr. Schwartz was interrupted by breaking news from New York: Gov. Eliot Spitzer, having been linked to patronizing prostitutes, was resigning. Mr. Schwartz was dismayed, but got a chance to make his points after the news break.

Later, as the crisis is reaching a breaking point, Bear convenes an emergency board meeting. But hey, former weed-smoking CEO James "Jimmy" Cayne had better things to do:

Mr. Schwartz arranged an emergency board meeting to brief directors that Thursday night. It was late, so most phoned in. James Cayne, who'd remained as chairman after stepping down as CEO Jan. 8, missed part of the discussion because he was playing in a bridge tournament at a Detroit hotel.

[WSJ; pic via Lolfed.com]

People who have spoken with Mr. Cayne say that he, like everyone at Bear, was stunned by the firm’s precipitous collapse and the rock-bottom price of its sale. In the past weeks, together with his wife, Patricia Cayne, who is a student of Jewish religious traditions, Mr. Cayne has spent considerable time searching for comparable events in religious history to see what lessons can be learned from the collapse of his firm, said a person who has spoken to him recently...

While Mr. Cayne has not publicly said why he sold his shares, people who know him say that it suggests a need to separate himself, emotionally as well as financially, from the firm that for so long had been part of every fiber of his being and that now had become a source of pain and disappointment.

Here's a taste of Wolfe's Croker, from A Man In Full, after his corporate meltdown and religious conversion:

"...You think if only you can acquire enough worldly goods, enough recognition, enough eminence, you will be free, there'll be nothing more to worry about, and instead you become a bigger and bigger slave to how you think others are judging you. 'You have priceless silver and goblets of gold,' said the philosopher, 'but your reason is of common clay.' As of this morning, I am as rich as the richest of you, for I am hereby handing over anything I own, the Croker Global Corporation, every last branch of it..."

"I don't know what you're like," Croker was saying, "but if you're like most uv'us here is Atlanta, you're driving yourself crazy over possessions. Just think about that for a second..."

"I can tell you that the only real possession you'll ever have is your character, that and your 'scheme of life,' you might say. The Manager has given every person a spark from His own divinity, and no one can take that away from you, not even the Manager himself, and from that spark comes your character. Everything else is temporary and worthless in the long run..."

"But you say, 'I'd rather die than sit down beside the road with a Dixie cup, begging.' Do you realize what you're really saying? You're saying, 'It ain't what I'm gonna eat or where I'm gonna stay I'm worrying about, it's saving face, it's what everybody in Buckhead's gon' think about me..."

Times: Down $900 Million or More, the Chairman of Bear Sells

1. The latest winning Powerball jackpot: $275 million
2. The salaries of the six cheapest Major League Baseball teams: $242.9 million
3. Microsoft's investment in Facebook: $240 million
4. The Houston Texans football team: $700 million
5. Tom Perkins's 289.1' sailing yacht Maltese Falcon: up to $300 million
6. Russian billionaire Roman Abramovich's forthcoming 482.6' motor yacht, the Eclipse: $300 million
7. David Beckham's contract with the Los Angeles Galaxy: $250 million
8. IM startup Meebo's desired valuation: $250 million
9. Alex Rodriguez's contract with the New York Yankees: $275 million
10. A brand new Airbus A380: $319 million
11. The most expensive building ever sold — 666 Fifth Avenue, New York City: $1.8 billion
12. The divorce settlement Heather Mills wanted from Paul McCartney: $250 million (Photo by AP/Mark Lennihan)