House of Cards (35 page)

In 1964, Cayne moved to New York City to try to become a professional bridge player, hoping to earn $500 a week. “I lived the life of a bachelor,” he said. “I had zero community responsibility. My focus was on enjoying myself.” In 1966, he won the Lebhar Trophy after he and his team won the Master Mixed Teams competition, his first national bridge tournament title.

For about a year, Cayne had been playing bridge regularly at the now-defunct Cavendish Club, on East 73rd Street. One day, George Rapee, the legendary bridge champion, invited Cayne to play as a professional in twice-weekly rubbers with wealthy businessmen. “I don't know you very well,” Rapee told Cayne, “but you seem to have an extremely good talent for playing with bad players.” Through these games, Cayne met the likes of Percy Uris, the Manhattan real estate magnate, and Larry Tisch, the self-made billionaire and investor. He would play with these wealthy businessmen in their homes on Fifth Avenue or Park Avenue. Rapee told Cayne the rules for these games were simple: keep your cool, no frowning, no berating your partners for dumb moves, and no soliciting the players for business.

Like Cayne, the world's best bridge players started learning and playing the game at a young age and have continued playing through adulthood, often while being high achievers in another profession. “It's extremely hard to come into the game in, let's say, your fifties after you've made your multi millions and expect to become that good,” explained Phillip Alder, who has played against Cayne and writes the bridge column for the
New York Times
. “It's just not possible. You had to learn when you were young…. People like Jimmy Cayne kept playing through careers as well. If you really want to play at top level, you have to keep playing.” Alder said he thought bridge appealed to Wall Streeters. “It's primarily a mathematical game,” he said, “and it's logic, deduction, and flair. In bridge you have to be able to read your opponents, to know what your opponents can and can't do, and get a sense of what they are doing and not doing at the table.”

Alder said that Cayne has the ability to read his opponents' body language, and that is one of the reasons he is easily among the best hundred
bridge players in the world. “He's not absolutely top drawer,” Alder said, “but he's pretty close.” He continued, “Bridge is addictive. You get very intense in it. And it's impossible to play perfectly, and you just try and do the best you can. Some days you're in the zone, and some days you're less in the zone.”

But Cayne soon grew tired of the life of a professional bridge player. “I loved the bridge,” he said, “but I needed a different experience. My net worth was zero or its equivalent. I thought, ‘I can't continue this. I'm a vegetable.’” He concluded he should return to the scrap iron business, the only business he knew well. One night at a cocktail party, by serendipity, someone he was chatting with suggested he apply for a job opening “for a nice Jewish salesman” at Lebenthal & Co., the municipal bond brokerage. He interviewed with the firm's matriarch, Sayra Fischer Lebenthal, who offered Cayne the spot. He quickly became a top salesman at the firm, even though he only worked around three hours a day. Jim Lebenthal, who took over the management of Lebenthal & Co. from his mother, remembered Cayne well as a “highly decent fellow with a pleasant, courtly style” and a “cool demeanor” who learned that municipal bonds could be a safe and reliable investment. Lebenthal, who graduated from Dalton, Andover, and Princeton, said he was not concerned in the least that Cayne was cut from a different cloth.

But a problem did arise about five years later when Cayne wanted to open an account for a customer who Sayra thought was too sleazy. “Jimmy wanted to sign up a fellow who did not have the normal name, rank and serial number,” recalled Jim Lebenthal. “It was the kind of character that Mother disapproved of, and Mother put her foot down and told him he could not open the account and could not do the business.” Cayne's version of the story is different. A few months into his Lebenthal stint, he met Percy Foreman, a famous Texas criminal-defense attorney who represented thousands of criminals, including James Earl Ray and Jack Ruby. Foreman became one of Cayne's best and most profitable customers. But Sayra's second husband, Arnold Ross, thought Cayne and Foreman were up to no good and, according to Cayne, accused them both of being “crooks.” Cayne said this could not be further from the truth. But there would be no more trading with Foreman. Cayne quickly realized his days at Lebenthal were numbered since he had lost his biggest customer.

At a bridge tournament in October 1968 he met Patricia Denner, a speech therapist with model looks and a 1960 graduate of the University of Pennsylvania who later earned both her master's in speech pathology
and a doctorate in psychology from Columbia University. “It was love at first sight,” Cayne said. “I was smitten.”

Cayne contacted Bill Root, Denner's bridge teacher and Cayne's friend, and discovered that she was newly divorced. He got her phone number and asked her out for dinner. After dinner at Trader Vic's and a few hours of bridge, she surprised Cayne by asking him to her apartment. “I never left,” he said. “Ever.”

He moved in with her immediately. After about three weeks, though, she was concerned that Cayne was nothing more than a bridge bum—he only worked three hours a day at Lebenthal and played bridge the rest of the time. Denner demanded that he go to law school or find a real job, or else find a new girlfriend. Cayne told her there was a problem with him going to law school because he hadn't finished college. So he opted for the second choice, and in 1969, at age thirty-five, he tapped into his bridge network and quickly arranged interviews at Goldman Sachs, Lehman Brothers, and Bear Stearns. He had never heard much about Bear Stearns since they rarely traded or underwrote municipal bonds. But he went ahead with the interview and got the job when Ace Greenberg discovered his prowess at bridge.

M
AY
D
AY

ayne went to work at Bear Stearns as one of sixteen retail brokers at the office at 1 Wall Street. He wasn't sure what to do on his first day, but then he discovered he couldn't do much of anything, by law, until he became a registered representative, which meant working at the firm for four months and then taking a test and passing it. The idea of taking such a test—which is esoteric and difficult—brought back all of Cayne's insecurities about studying and academics. The firm got him a tutor to help him study for the examination. But the idea of doing nothing for four months made him crazy. “Every day I came in,” he said. “I couldn't do any business. I couldn't do anything except sit there and watch the tape.”

Cayne passed the test and started making calls. But his only contacts were the municipal bond buyers he knew from Lebenthal. “I find out very quickly not many of them have any interest in the little green
animals”—a reference to stock ticker symbols that flash green when the stock is up for the day. “They're not stock people. They're municipal bond people.” It dawned on him quickly that he had been playing bridge at the homes of several of the largest individual investors in the market, including one—Larry Tisch—who may well have been the single largest individual investor in the market. The problem for Cayne was that he had promised George Rapee he wouldn't solicit business from people he played bridge with. He called up Rapee. “George, I need your help,” Cayne said. “I want your permission to solicit Larry Tisch. I'm a broker. He's like one of the biggest guys on the Street. I might get a reception. I may not. But I'd like to try. But I can't do it without you releasing me.”

Rapee gave him permission, and Cayne's first successful call at Bear Stearns was to Tisch. He'd been often to Tisch's apartment on Fifth Avenue, but this was a different kind of call. “It's like his son called him,” Cayne said. “‘Jimmy!' I said, ‘You remember, I was the bridge toy.' He said, ‘How you doing? Nice hearing from you. What can I do for you?' I said, ‘I just became a broker at Bear Stearns.' He said, ‘Great. Send me the papers. You'll handle all my accounts.' And he hangs up.”

It was magic. Giddy, Cayne called Greenberg and told him what had just happened. “You're not going to believe this. The best first call of all time. He's the biggest guy on the Street. Larry Tisch. He wants to do business with me.” Greenberg was completely silent. Cayne recalled: “I said, ‘This is a strange reaction.' He said, ‘Well, that's Cy's account.' I said, ‘Cy? Who's Cy?' He said, ‘Cy's the senior partner of the firm.' I said, ‘Wait a second. Let me get this straight. The senior partner of the firm has got an account line to Larry Tisch. A salesman working at the firm has just been told by the guy to handle all his accounts and now you're telling me there's an issue because Cy Lewis handles the account?' He says, ‘Jimmy, that's the way it is. You'll hear from him. Don't be upset. Because he's a rough, tough guy and he may be a little gruff on the phone.’” Greenberg told Cayne that he had to tell Lewis what had happened with Tisch and that Lewis was certain to call him and let loose.

A row of biblical proportions ensued when Lewis called Cayne. “Did you ever see those ads when somebody's talking on the phone and he's like this?” he asked, holding the phone receiver far from his ear. “I basically heard words I never heard before, and I grew up in Chicago and I heard a lot of words. This guy reamed me. ‘How dare you call my account?' and then he hangs up.” Cayne reported the conversation—such as it was—to Greenberg, who told him he had to call Tisch back. “I call him back,” Cayne said. “He said, ‘What can I do?' I said, ‘Well, it seems that the senior partner of the firm thinks you're—' Tisch interrupted,
‘Jimmy, I'll take care of that.' Click.” At 1 Wall Street, Bear Stearns had two floors, the sixteenth and the seventeenth. “Sixteen is the little people and seventeen is the mucky-mucks,” Cayne said. Greenberg called Cayne and essentially told him never to set foot on the seventeenth floor, Cayne recalled. “Because Larry Tisch called Cy Lewis and ripped him a new one, saying, ‘If that kid doesn't handle my account, I'm leaving Bear Stearns.”‘

In the end, much to Lewis's ire, Tisch chose Cayne. “He became just the biggest champion you could ever have,” Cayne explained. “And that wasn't just a one-time occasion. That was an all-time occasion.” Using his bridge connections and his own wiles, within a few months Cayne quickly became an immensely successful broker. He only had about a dozen accounts, four of which were very active and all of which he had obtained using his contacts from the bridge table. “People for whatever reason think, ‘If you're a good bridge player, you've got a good brain, so I might as well do business with you,’” Cayne said. “I never really had an opinion. Am I going to tell Larry Tisch what to buy? Doesn't that sound absurd to you? He's one of the most successful investors of all. But I executed for him.”

As another example of Cayne's chutzpah, he wanted to see if he could get Sam Stayman as his client. Stayman was a world-renowned bridge player who had won the first three world championship bridge tournaments after World War II. A bridge partner of George Rapee, Stay-man won nineteen national bridge titles and innovated a number of bidding conventions, including one named for him. Professionally, after owning and selling a woolen mill in Rhode Island, he started one of the first hedge funds, Strand & Co. “I knew Sam from the bridge world,” Cayne said. “Sam at the bridge table was a dick. Tough. Rough. Not nice. Brute. Crude. Away from the bridge table, a gentleman's gentleman. Pillar of society. Charitable. Philanthropic. The works. But at the bridge table, very tough. So now I have this date. I go up to see him and his brother-in-law. Tell them I'm a broker at Bear Stearns. Gave them an idea of how I could be helpful because I know that they were new-issue-oriented. So whatever new issues Bear Stearns got, he wasn't given an allocation because he didn't do any business [with us]. So what I would do is I would take the allocations of all the people here who got stock and somewhere between the bid and the ask he'd be able to buy them, so everybody was happy. That was my idea. And I think I scored. I come back to the firm, and the next day Greenberg calls me and says, ‘Sam called.' And I said, ‘Yeah. When do I start?' He said, ‘You're not ready yet.' I wasn't a kid. I was thirty-five years old. I'm not ready yet? Interesting. Still a dick.”